How does the government regulate money supply?

[Suba]

Money supply is the total supply of money circulating in a region or country. What is meant by money in circulation includes the money we use as a means of daily transactions such as coins and banknotes, balances in savings and checking accounts, and other types of money. Monye supply is also key to studying macroeconomics. The way to calculate the money supply is to add up all the types of money in circulation, or it will be easier if you look at the money supply data at your country's central bank.

 

[Starmix]

I do not have any dea about how the government in my country regulates the money supply. It is good to know though so people will know where the money goes.

 

[Suba]

Money circulating in society must always be maintained by the government or central bank of each country. In simple terms, the government controls the money supply by making monetary policies, such as evaluating people's income, interest rates, policies in making and circulating money, etc.

 

[Starmix]

That's a very good information. Central bank is very strict this time and people are aware of it especially on our new 1000 peso bill that is so delicate and we're not allowed to fold it.

 

[Suba]

That's a very good information. Central bank is very strict this time and people are aware of it especially on our new 1000 peso bill that is so delicate and we're not allowed to fold it.

I've seen a new 1000 peso bill on the internet, how much is it worth in USD, why can't it be folded, how to put it in a man's wallet or trouser pocket. What is the current interest rate in your country?

 

[Starmix]

I've seen a new 1000 peso bill on the internet, how much is it worth in USD, why can't it be folded, how to put it in a man's wallet or trouser pocket. What is the current interest rate in your country?

1000 pesos is equivalent to $ 20 USD. For females we need a wide wallet hehe and for men, they go to bank and request replacement. Filipinos opposed on this idea not to fold it, so the Central Bank allowed one folding. We seldom hold the new 1000 bill.

 

[Starmix]

Where does your money go? We have money here everywhere in banks. Those salaries over the counter need not to go to a bank. Money is regulated by the Central Bank.

 

[Fidelia]

Government regulates the supply of money through it's fiscal and monetary instruments. This is carried out by the ministry of finance and CBN respectively. One fiscal policy tool is taxation while one monetary policy tool is interest rates.