If the country's currency issuing institutions issue excessive currency, but the productivity does not increase correspondingly, that is, the goods produced do not increase correspondingly, so that more money is needed to buy goods because of the relationship between supply and demand, thus devaluing the currency internationally.
The formula for calculating the law of currency circulation: the amount of money necessary for circulation in a certain period = commodity price × commodity circulation/unit currency circulation speed = total commodity price/unit currency circulation speed.
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Related instructions
Money is just a form of government controlling the national economy. For example, if the government wants to enrich the national treasury, one way is to levy taxes normally and the other way is to print money.
The second method is because the productivity has not developed correspondingly (the quantity of goods has not increased correspondingly), and the money in the hands of ordinary people is worthless, which means that the second method will make the government rich and the ordinary people poor, and then the ordinary people can't afford to buy things, which is not conducive to economic development (not conducive to the increase of commodity output).
Therefore, the government tries to ensure the stability of the issue currency. To make the whole country rich, we must ensure economic development. After economic development, more goods will be produced, more goods will be bought with less money, and the currency will appreciate. Then, in order to ensure the balance of import and export, the government will print some money to circulate in the market so that the currency will not appreciate too fast.
Baidu encyclopedia-currency circulation