Traditional Culture Encyclopedia - Traditional virtues - Chinese people know what is the core of the idea of traditional Chinese finance
Chinese people know what is the core of the idea of traditional Chinese finance
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Materials in short supply, we must control the circulation of money, materials surplus have to spread money in a big way to increase the circulation of money. When productivity is low, the rate of production is less than the rate of consumer demand, materials are difficult to meet the demand, it is manifested in the shortage of materials, goods depreciation, so we have to control the amount of money in circulation, to prevent prices from rising, but to stimulate consumption. When productivity is developed, the rate of production is greater than the rate of consumer demand, it is manifested as a surplus of goods, currency appreciation, so we must increase the amount of money in circulation, to prevent prices from falling, but at the same time also inhibit the growth of consumption. It can be seen that price fluctuations are caused by an imbalance between supply and demand, and stabilizing prices with the circulation of money will only exacerbate the imbalance between supply and demand. The fundamental solution can only be to expand production and increase productivity if there is a shortage of goods; and to suppress production or let prices fall if there is a surplus of goods
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