ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The emperors minted millions of coins to cover expenditures, flooding the economy with worthless pieces of copper alloy with a thin layer of silver. This destroyed public confidence in Roman currency, and rampant inflation took hold. Gold and silver mines ran out, as did Rome’s supply of conquerable enemies.

Detailed explanation-2: -The Roman Imperial monetary economy often suffered bouts of inflation in part by emperors who issued money to fund high-profile imperial projects such as public building works or costly wars that offered opportunities for propaganda but little or no material gain.

Detailed explanation-3: -The unrest obviously affected the balance of revenues and expenses, while eventually altered the financial policy of the emperors. Part of this financial policy was the production of coinage and its manipulation. The result of this policy was the increase of prices in the market that allegedly led to high inflation.

Detailed explanation-4: -In 301 A.D. the Emperor Diocletian, with whom were associated his three co-rulers, promulgated an edict which fixed for the whole Roman Empire maximum prices for commodities, freight rates, and wages.

Detailed explanation-5: -Roman emperors chose to stretch the money supply to help pay for these obligations by debasing their coins with cheaper metals, such as copper, while keeping the face value of the coins constant. Debase-ment increased the money supply and thus the government’s spending power.