How does the govt. manages money flow i.e. total flow ( cash + credit card) in the country....does it remain same every year or grows... if it grows than on what basis the new money is added......
2006-07-06 05:30:06 · 3 answers · asked by indianmale 1 in Business & Finance ➔ Investing
You need to get your terminology straight. It's not "money flow", it's "money supply". And the government has nothing to do with managing money supply; it's the central bank's job. In the U.S., the central bank is called Federal Reserve System.
2006-07-06 05:38:37 · answer #1 · answered by NC 7 · 0⤊ 0⤋
The central bank manages it by adjusting short-term interest rates, and by changing the reserve requirements of banks. The central bank decides these based on expected inflation. It changes each year because expected inflation changes.
2006-07-06 07:19:25 · answer #2 · answered by poodog13 1 · 0⤊ 0⤋
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2014-12-08 19:47:21 · answer #3 · answered by Anonymous · 0⤊ 0⤋