Third and Final Macroeconomic Question: Money and the Economy

Philippines
September 25, 2012 10:10am CST
How do changes in the amount of money in the economy affect output, growth, unemployment and inflation?
46 responses
• Philippines
28 Sep 12
For me,this in turn tends to have a slowing effect on the economy's growth in the long run in time of anticipated high inflition consumers and businesses often barrow less because of the high interest rates.
• Philippines
28 Sep 12
p.s. edward samson.ab-econ 2a
26 Sep 12
Changes in the amount of money in the economy affects the output, growth, unemployment and inflation, through the changes it makes. If the amount of money decreases then every part of the economy that actually produces money will always be affected, the goods and services offered might decrease, unemployed people will increase since most of us wants to apply in a job that offers a big amount of salary, our economic growth will surely affect the development of our economy if the changes in the amount if money in the economy decreases. But on the other hand if the change in the amount of money in the economy increases, well the flow of our economy will go smoothly and not even a single problem will get worst :)
26 Sep 12
I mean it depends on the changes it makes whether increasing or decreasing.
@Olleenz (3404)
• Indonesia
25 Sep 12
Think inverted, .... If growth bigger than inflation it mean output will bigger and unemployment will reduces (under several condition / circumstances) and this made changes in the amount of money. So ... key is on growth
• Philippines
25 Sep 12
Thanks for the response.
1 person likes this
@arrianne (29)
• Philippines
2 Oct 12
For me, the change in the amount of money in the economy really affects lot of aspects...the OUTPUT, GROWTH, UNEMPLOYMENT and INFLATION.. example, if a companies don't have an enough money to defray the expenses in the production of their products the result would be lesser output. As the amount of output became lesser their is no growth in the economy by the reason that buyers can not buy products they need for the reason also that the products do have a higher price because of shortage.Because companies do have a financial problem, they need to lessen the people who worked for them. And by that reason, The purchasing power declines due to unemployment... no money to be spent by those people who don't have their work...
• Philippines
2 Oct 12
Money has been the medium of exchange since after the barter time.It could be coins or a form of bills.It serves as a measure or standard of value, a store value, and means of deferred payment. but if there would be a change in money of course there would be an effect to the economy as a whole. For example, if there would be a lot of money produced compared to the ability of the country to supply goods and services it would results to INFLATION. Wherein there would be "too much money chasing too few goods" (based on the book). The citizen , government, businessmen, creditors, debtors, will be definitely affected. So for this not to happen Monetary policies has been implemented. Which is the role of the BSP, they regulate the flow,the creation, distribution and composition of money.
1 Oct 12
every time the amount of money in the economy changes the people need to adopt the economic situation and adopt it to their daily living
• Philippines
1 Oct 12
for me..the amount of money or the money supply inside the economy affects : OUTPUT; lower money supply means there will be lower production rate of outputs to be made by a firm, industry or country. GROWTH; lower money supply means there will be lower production of goods and services in an economy. UNEMPLOYMENT; lower money supply means the companies will hire lesser people just to acquire lesser expenses in labor or manpower. INFLATION; lower money supply means that the producers in the economy will try to maximize the profit they can get; that's why they will higher the prices.
• Philippines
1 Oct 12
for me..the amount of money or the money supply inside the economy affects : OUTPUT; lower money supply means there will be lower production rate of outputs to be made by a firm, industry or country. GROWTH; lower money supply means there will be lower production of goods and services in an economy. UNEMPLOYMENT; lower money supply means the companies will hire lesser people just to acquire lesser expenses in labor or manpower. INFLATION; lower money supply means that the producers in the economy will try to maximize the profit they can get; that's why they will higher the prices.
• Philippines
1 Oct 12
The manipulation of the money supply with the objective of affecting macroeconomics outcome such as GDP growth,inflation anf unemployment and exchange rates.
1 Oct 12
For me. Changes in money greatly affect output growth unemployment and inflation.If the amount of money the country or company attained is declining.There would be a big possibility that the economy will diminish.Chances are,it will lead to cross cutting of important factors involving production of outputs(products)such changes will highly affect employment that will lead to unemployment and worst inflation.If money changes increasingly compared to its original rate,it would be a good sign that the country is regaining monetary development that would lead to more production,more jobs and more chances of becoming stable. Jemelee Mae A. Colinares.econ 2B.
• Philippines
1 Oct 12
For me the amount of money greatly affect output,growth,unemployment and inflation. An increase in money supply leads to more consumption and spending from the households and more people are willing to purchase. Because of this, there is a greater need to increase output to meet all the demands and this will lead to economic growth and also employment but if there is still an increase supply of money without the government intervening, product and service providers wont meet the demand for more purchases so there would be lesser goods available which causes inflation.And this where the government comes in, to ensure that the price of money is stable.
• Philippines
1 Oct 12
It affects a lot especially when the amount of money decreases. In the economy, the quantity of goods produced over a given period. It may decrease and sometimes increase. For the growth there is also progressive increase or decrease in the development. Unemployment because the amount of money decrease also. For the inflation it is also marked expansion of credit and sharp rise in prices.
• Philippines
1 Oct 12
FOr me' Most economists would agree that in the long run outpot usually measured gross domestic product, any change in the money suppl money cause price to change, but in the short run,because price and wages usually do not adjust immediately changes iin the money supply can affect actual production of good services,
1 Oct 12
The amount of money affect the economy high or unpredicable inflation rates are regarded as harmful to an overall economy . they add inefficiencies in the market and make it difficult for companies to budget or plan long term . inflation can act as a drag on productivity as companies are force to shift resources away from the products and services in order to focus and profit and losses from currency inflation. when the price level increase the adjudged substantially to be a monetary phenomenon , monetary policy uses its tools to effectively check money supply with a view to maintaining price stability in the medium to long term . therefore the more business less unemployment people .
1 Oct 12
the amount of money affect the economy high or unpredicable inflation rates are regarded as harmful to an overall economy . they add inefficiencies in the market and make it difficult for companies to budget or plan long term . inflation can act as a drag on productivity as companies are force to shift resources away from the products and services in order to focus and profit and losses from currency inflation. when the price level increase the adjudged substantially to be a monetary phenomenon , monetary policy uses its tools to effectively check money supply with a view to maintaining price stability in the medium to long term . therefore the more business less unemployment people .
1 Oct 12
the amount of money affect inflation because the value of money decreases with inflation as the prices for goods and services rise. Therefore, the purchasing power of consumers declines as their salaries remain unchanged and the cost of living grows.The amount of money in the economy affect unemployment because economic growth and force firms to lay off workers, raising the unemployment rate.
1 Oct 12
We all know that money is the medium of exchange in the whole world so the higher money there is chances to invest new business so therefore it may help to decrease the unemployed person in the country. If there is more business in the country the amount of money would increase and less unemployed person..
• Philippines
1 Oct 12
Change in money in our economy can affect in our society in the sense that if growth and output will increase there will be sufficient consumer of product, and the product will not be wasted because people in the economy will have a money in order to buy there needs, and the unemployment & inflation well be decreases because of the increase in of growth and output. .
• Philippines
1 Oct 12
One reason why output, growth, unemployment, and inflation improve or decline is the amount of money in the economy. When the country is producing much number of money, the output of production is very low due to large number of money is needed for the raw materials and that is why growth is very hard to achieve. Businesses would find it hard to keep huge amount of money. Employment in the country is also affected when there is low or high production of money. Businesses would no longer hire workers when it is impossible for them to earn profit and it would result to a large number of unemployed citizen in the country. And so our economy will collapse as well as our country. When there is a lot of money available inflation is not visible as the value of money is very low. Likewise if there is low amount of money in the country inflation is at its highest peak resulting for our economy to fall down hard.
1 Oct 12
The amount or volume of money in circulation greatly affects the economy's output and outcome, because it is undeniably that the variables that has to do with the economy's progress is resistant to change "nominal rigidity". For when the money in circulation is dense/inadequate would reflect the current situation of a country is at and would only reflect or indicate instability of a nation, that eventually may lead to certain depression of an economy. Thus monetary policy and tools should be sufficiently adequate.