Indeed, an intuitive review of how population relates to the quantity of goods in circulation should lead us to conclude that they are directly proportional. Assume you travel to the distant past, say, to the Mayan Civilization. How would you estimate the number of inhabitants in the Mayan heyday? Would you determine this by the number of barbers, dancers, or priests that they had? Or assume that you traveled to another planet to find that human-like beings went extinct long ago. You discover in a rusty computer somewhere that there were 10 insurance companies insuring people for a total value of 1 trillion dollars and that the 10 banks that operated had deposits for a total of 5 trillion dollars. What would this tell you about total population? How much was a dollar worth? Just consider what would happen today if I wave my magic wand and double the money in circulation in the U.S.? What would that tell us about its population?
Posted on: Tue, 09 Jul 2013 09:33:12 +0000
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