Final answer:
Printing more money causes prices to rise due to increased demand without a corresponding increase in supply.
Step-by-step explanation:
A government cannot simply print more money to stop inflation. In fact, printing more money causes prices to rise. This is because when there is an increase in the money supply, people have more money to spend, but the supply of goods and services remains the same. As a result, the demand for goods and services exceeds the supply, leading to an increase in prices. This phenomenon is known as monetary inflation.
For example, if the government decides to print more money and distribute it to the public, each individual will have more money to spend. This increased purchasing power will drive up the demand for goods and services. However, since the supply of goods and services has not increased, the prices will rise to equilibrate the increased demand.
In conclusion, it is false to say that a government can simply print more money to stop inflation. In reality, printing more money exacerbates inflationary pressures and leads to a decrease in the value of the currency.
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