The issuing law of banknotes

The issuing law of banknotes

The devaluation of banknotes and the rise of prices are caused by the issue of banknotes exceeding the amount of precious metal currency needed in commodity circulation, Inflation is an economic phenomenon that is easy to appear under the condition of paper currency circulation. At present, the main index to measure the degree of inflation in the world is the price index. The price index is a relative index reflecting the changes of the price level in two periods. The price level is also called the general price level, which is the weighted average of the prices of all kinds of goods and services, It shows that the trend of inflation is strengthening. To determine the degree of inflation according to the rising trend of prices, the theorists generally believe that when the annual average increasing rate of the general price index is 2% - 3%, it is called basically stable; when the annual average increasing rate of the general price index is less than 9%, it is called moderate inflation; when the annual average increasing rate of the general price index is more than 10%, it is called hyperinflation