Effect On Society
Some of the ill-effects that counterfeit money has on society are:
- Reduction in the value of real money
- Increase in prices (inflation) due to more money getting circulated in the economy - an unauthorized artificial increase in the money supply
- Decrease in the acceptability (satisfactoriness) of money - payees may demand electronic transfers of real money or payment in another currency (or even payment in a precious metal such as gold)
- Companies are not reimbursed for counterfeits. This forces them to increase prices of commodities
At the same time, in countries where paper money is a small fraction of the total money in circulation, the macroeconomic effects of counterfeiting of currency may not be significant. The microeconomic effects, such as confidence in currency, however, may be large.
Read more about this topic: Counterfeit Money
Famous quotes containing the words effect on, effect and/or society:
“To speak impartially, the best men that I know are not serene, a world in themselves. For the most part, they dwell in forms, and flatter and study effect only more finely than the rest.”
—Henry David Thoreau (1817–1862)
“Even a purely moral act that has no hope of any immediate and visible political effect can gradually and indirectly, over time, gain in political significance.”
—Václav Havel (b. 1936)
“It used to be said that, socially speaking, Philadelphia asked who a person is, New York how much is he worth, and Boston what does he know. Nationally it has now become generally recognized that Boston Society has long cared even more than Philadelphia about the first point and has refined the asking of who a person is to the point of demanding to know who he was. Philadelphia asks about a man’s parents; Boston wants to know about his grandparents.”
—Cleveland Amory (b. 1917)