Why is there a limit on how much money can be printed in a Country/Region?
In: Economics
I not sure that the question is s valid. In the USA the Federal Reserve Bank, a private company that is controlled by the Government acts like a central bank.
They exchange old currency for new, as well as distribute coins. They lend money to other banks as well.
The total amount of money in the entire system is called the M1 money supply. When the Government wants to increase the amount of the M1 supply, the make loans. This does not actually mean that money currency is being created just that the total “value” of the M1 supply increases.
Money is constantly being printed to replace currency that is taken out of circulation due to damage.
If the amount printed exceeds the amount removed that would cause inflation but there are times that probably happens. There are also probably times that less is released than was destroyed. I am. Guessing but it is probably to keep the value of currency stable.
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