How_Money_Works_-_The_Facts_Visually_Explained
78 79 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Financial institutions ❯❯Premium The amount of money an insurance company charges ...
Investment companies Investment companies buy and sell equities, bonds, and other financial assets on behalf of their clients, a ...
80 81 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Financial institutions How it works Investment companies pool investors’ funds to ...
As a consequence of the financial crisis of 2008–2009, regulatory authorities have been reconsidering their approach to financia ...
82 83 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Financial institutions NBFIs are not accompanied by the same guarantees and prote ...
$ $ $ $ US_084-085_OPENER_CH3.indd 84 13/10/2016 16:17 ...
GOVERNMENT FINANCE AND PUBLIC MONEY ❯ The money supply ❯ Managing state finance ❯ Attempting control ❯ Why governments fail fina ...
The money supply The money supply is the total amount of money in the economy at a given time. The government monitors this supp ...
86 87 GOVERNMENT FINANCE AND PUBLIC MONEY The money supply LESS LIQUID $ Broad money M2, M3, and M4 constitute broad money. This ...
Increasing money circulation Most of the money in the economy occurs in the form of bank deposits—the appearance of funds in ban ...
88 89 GOVERNMENT FINANCE AND PUBLIC MONEY The money supply In accounting, this bookkeeping system requires that every business t ...
$5,000 Required reserves are held in a bank’s vault as hard currency (and used for cash withdrawals), or held with the central b ...
90 91 $ $ B D $ A GOVERNMENT FINANCE AND PUBLIC MONEY The money supply $ $ $ BANK A $ $ BANK B $ $1,000 is deposited in Bank A b ...
Recession and the money supply The way money is used in an economy will change depending on how well or badly that economy is pe ...
92 93 GOVERNMENT FINANCE AND PUBLIC MONEY The money supply How it works A recession is a period during which the economy, as mea ...
Recession to depression A sustained period of deep recession is known as a depression. During this time a country’s GDP falls fo ...
94 95 GOVERNMENT FINANCE AND PUBLIC MONEY The money supply How it works A depression occurs following a protracted period of dee ...
Balancing the books Government spending today is largely to meet demand, and typically accounts for around one-third of a countr ...
96 97 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance PRINTING MONEY $6.7 trillion the amount the US government spent ...
How it works A healthy economy requires a good money supply. Although it is difficult to control the supply of money directly, g ...
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