Farmer monkey grow 1000 bananas each year. For monkeys to get bananas, the monkey government make leaves. First year, they make 1000 leaves, so a monkey can exchange one banana with one leaf. People consume the bananas, but leaves do not perish.
Next year, farmer monkey grow 1200 bananas. If monkey government makes 1000 leaves that year, total leaves in the monkey country becomes 2000. Farmer monkey cannot keep the previous year’s exchange rate as they would run out of bananas, so it starts to charge more to break even.
Farmer monkey grow 1000 bananas each year. For monkeys to get bananas, the monkey government make leaves. First year, they make 1000 leaves, so a monkey can exchange one banana with one leaf. People consume the bananas, but leaves do not perish.
Next year, farmer monkey grow 1200 bananas. If monkey government makes 1000 leaves that year, total leaves in the monkey country becomes 2000. Farmer monkey cannot keep the previous year’s exchange rate as they would run out of bananas, so it starts to charge more to break even.