How is money fed into economy?

Question

After it is made where does it go. How is it generated and concerntrated into profits.

How do banks inverts and gain money.

Answer 1

Money is created by two groups of institutions. 1. The Federal Reserve System, and 2. Banks.

The Fed increases money supply mostly through open market operations. It buys Treasury securities, and it does so with money. If it wants to decrease the money supply, it sells Treasury securities, which brings back money to the Fed.

Banks create money by making loans. Suppose that the Fed increases the money supply by $100 by buying Treasury securities from Individual 1. Individual 1 puts the funds into a bank account, and the bank makes a loan to Individual 2. Individual 2 puts the proceeds from the loan into a bank account and the bank makes another loan.......