ETAR - 5MUS

Important things to remember.

The flow of money in the macroeconomic cycle can only be controlled through policy - regulations made by the government.

Money cannot be increased or decreased by simply printing.  It multiplies though the macroeconomic cycle of factor payments, interests, expenditures, export payments, and investments.

When people have a lot of money to spend, that is the situation when there is a high amount of money in circulation.  Because people buy a lot, sellers increase prices.  So how can the money be decreased?

The answer can be found in the chapter on money, particularly monetary policy.

Try to provide one method on how the Central Bank can reduce or increase the amount of money in circulation.  Anyone able to provide an answer gets extra credit for quiz scores.   There are only a particular number of methods, so no repetition.

Questions may be posted on the comments box.

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