How Regulations Cause Inflation

Over at GuerillaEconomics.com, I have a short piece explaining how regulations cause inflation:

Imagine a simplified economy that consists of just two things: 100 dollars and 100 apples, with the price of an apple being one dollar each. If new regulations pass that make it harder to produce apples, the next year there are only 90 apples produced. Their price goes up from $1 to $1.11.

Read the whole thing here.

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