This is the most common doubt that everyone gets and occasionally during crisis time like this

Why can’t RBI print more and more currency during crisis time to help the country and its people?

  • Here is small example There are 12 people living in a country called india. The average income of each person is 12/- per year. 

  • Country india  produced 12 kgs of rice per month and each KG of rice costs 1rs. The country india produced 120kgs of rice per annum. 


Now, the country india wants to increase its economy. So, they thought of printing more currency notes. Reserve Bank of country india has printed more currency notes and
 so, the salary of 12 people in the country has increased by 12/-. 
So, now the annual income of each person in the country became 24/-.
 Now, the people of india country are capable of buying anything because of the increase in their salary. But, the production of rice which is now 120kgs per year cannot be increased as it is not in the hands of people or government. So, the rice sellers will now increase the price. Now, 1kg of rice which was 1/- has now become 12/-. This means that people have more money and production is less. This phenomenon is called “HyperInflation”.






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