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← The Cantillon Effect
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Question
What is the core insight of the Cantillon Effect?
1
Inflation benefits borrowers and harms lenders equally regardless of when the money enters the economy
2
Money creation always causes inflation proportional to the amount created
3
New money enters the economy at specific points, benefiting early recipients before prices rise and harming later recipients after prices have risen
4
Government spending always increases GDP by a multiplier of two or more
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