The quantity of money circulating in an economy affects both micro and macroeconomic trends. At the micro level, a large supply of free and easy money means more personal spending. Individuals also have an easier time getting loans such as personal loans, car loans, or home mortgages.
At the macroeconomic level, the amount of money circulating in an economy affects things like gross domestic product, overall growth, interest rates, and unemployment rates. The central banks tend to control the quantity of money in circulation to achieve economic objectives and affect monetary policy. Through this article, we take a look at some of the common ways that central banks control the quantity of money in circulation.
By Prableen Bajpai, CFA (ICFAI) | Updated May 8, 2017 — 12:58 PM EDTRead more: How Central Banks Control the Supply of Money | Investopedia https://www.investopedia.com/articles/investing/053115/how-central-banks-control-supply-money.asp#ixzz586TOX7ik
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