Inflation Explained By Apples

Added: 2026-05-01

[00:00:00]In our economy, we have 100 apples and $100. In this case, one apple costs $1.

[00:00:06]If the quantity of dollars rises, but the quantity of apples stagnates, the price of the apple rises. For example, if another $100 are printed, in our economy, the same amount of apples remains, but the dollars double. This results in the price of apples doubling, a complete disaster. As you might guess, the government could spend the extra 100 bucks the right way to make the quantity of apples rise. They could give the money to the farmers who could upgrade their processes, but usually this is not the case.