how printing of money affects the country

How printing of money affects the country is a question that has occupied people for many decades. It is an eternal debating point between a government that prints too much money and a country that lacks it in the monetary system. This is because money is used to buy goods and services, to invest in stocks and to pay off debts. A lot has been written on this subject but very few have attempted to answer it through a logical approach and have therefore failed in explaining how printing of money directly benefits the country.

The argument usually centres around the role of money in international trade. There are those who argue that printing of money directly benefits businesses by reducing costs of transporting their goods from one country to another, while others argue that a reduction in exchange rates between countries causes inflation that benefits only the local businesses. The problem with these arguments is that they are not entirely true. International trade does indeed cause inflation, but it is indirect. The price level in domestically manufactured goods tend to be too high while the price level in imported goods would also be too high if there was no trade.

Printing of money also indirectly benefits the country because it increases the demand for foreign currency. The more there is money floating around in the world, the more foreign companies will open up shops and hire workers. This causes the exchange rate to go up and so the cost of imported goods goes down. The overall effect is that the country's goods become cheaper and the country can sell them for more and earn more. Printing of money thus directly benefits the company and the consumer as both are benefitted by printing of money.