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How Money is Created
Essay specific features
Written by:
Howard H
Date added:
March 22, 2015
Level:
University
Grade:
A
No of pages / words:
2 / 462
Was viewed:
3998 times
Rating of current essay:
Essay content:
Central banks have two major powers: “they can regulate the nominal level of short-term interest rates, and they can purchase assets such as government debt, with newly printed money”. (Benson, 2004) When the central bank lowers the rate of short-term interest, it greatly encourages corporate and individual borrowing and spending...
displayed 300 characters
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Base money is created when the Federal Reserve performs what are known as Open Market Operations. Here, the Federal Reserve injects money by buying Government Securities, or also known as , creating money “out of thin air”, which then becomes owned by the government (the American Taxpayer) to the Federal Reserve...
displayed 300 characters
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