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When the federal government needs more money than it is getting through taxes and by borrowing, it can increase the supply of money simple by printing more. The circulation of this additional money contributes to inflation. Easy-to-obtain consumer credit also produces more inflation. If financial institutions make too many loans, there is more money available for consumer goods and services to get what they want to buy. The problems arises when there are not enough goods and services to meet this demand. Each dollar becomes worth a little less, and it takes more dollars to buy what you want.