Browsing: Money Basics

A recession is technically defined as two consecutive quarters of the fiscal year with a decline in the gross domestic…

Hyperinflation is a situation of very high, fast, and uncontrolled increases in the prices of goods and services in the…

Deflation is the contraction of the currency supply. Most countries have a central bank that acts as a key player…

The current monetary system brings into being an unlimited currency supply, which in extreme cases creates inflation. The invention of…

The previous article talked about the concept of international trade. This paper aims to explore more thoroughly the relationship between…

International trade is the exchange of goods and services across international boundaries. It is essential for the global economy to…

Central banks can generate a virtual currency called central bank reserves. Banks can use these reserves to transfer payments to…

Where Money Comes From Banks create currency. Money does not originate from economic activity. Many people have the misconception that…

My earlier articles introduced the subjects of how money is created by central banks and commercial banks, as well as…

In earlier posts, we explored the creation of money by central and commercial banks. This creation process is a carefully…