How_Money_Works_-_The_Facts_Visually_Explained

122 123 Investment increases due to cheap loans and high confidence Export prices fall Exports increase Import prices rise Impor ...

Quantitative easing is a 21st-century strategy aimed at boosting the economy. It uses the central bank’s powers to create new mo ...

124 125 COMPANY COMPANY COMPANY GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control Increased reserves reduce interest rates ...

The level of taxation Pigouvian taxes in action Standard economic theory says that if consuming goods or services causes harm, a ...

126 127 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control 24% estimated percentage of economic activity in Greece that went ...

SPENDING VS CUTS Government spending can directly support the economy, such as expenditure on transport and communications. Scie ...

128 129 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control Pensions and welfare 31% Interest payments 5% Health 22% Transpor ...

€ TRANSPORT How it works Governments usually take responsibility for providing the buildings public services use, and for buildi ...

130 131 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control individuals on things such as CAPITAL SPENDING AND BORROWING mach ...

Cost-push inflation There are several factors that can cause costs to rise. An increase in the price of raw materials, for insta ...

132 133 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control Higher wages The employees demand better pay, as it appears that ...

INFLATION Demand-pull inflation In an expanding economy, a phone company experiences a sudden increase in demand for their produ ...

134 135 $ GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control $ $ $ $ $ $ Prices rise With an increased money supply and high ...

THE THREE PARTS OF A BOP ACCOUNT How it works A country’s balance-of-payments account provides a record of all of its internatio ...

136 137 IM PO RT GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control REST OF THE WORLD This account monitors international po ...

How it works A country’s economic conditions change from day to day, which is why exchange rates also fluctuate continuously. Th ...

138 139 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control Bank actions When a country’s central bank expects the currency’s ...

How it works In most countries, it is the current working generation that is funding the pensions of those who have reached reti ...

140 141 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control ¥ Increased assets from investments PENSIONERS LIABILITIES Paymen ...

Why governments fail financially It is possible for a government to fail financially, and there are two main ways this can happe ...