How_Money_Works_-_The_Facts_Visually_Explained
98 99 KEY INFLOWS GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance THE CASE FOR INDEPENDENT CENTRAL BANKS Many central ...
A central bank is the “bankers’ bank,” acting as guarantor for the rest of the banking system by supplying extra funding when it ...
100 101 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance Central bank The central bank creates and supplies reserve mo ...
THE CENTRAL BANK Managing the monetary system By raising or lowering its reserve rate of interest, a central bank can influence ...
102 103 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance Open market operations: selling bonds The central bank sells ...
Budget constraint Governments have financial constraints just as individuals and companies do. When spending exceeds income, the ...
105104 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance HOW GOVERNMENTS RAISE MONEY Governments can raise funds to mee ...
How it works Governments have the unique privilege of being able to demand that anyone in their country pay taxes. These can be ...
106 107 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance Because tax systems vary so widely from country to country, i ...
Government funds A typical government receives most of its financing in the form of taxes, but borrowing is also often necessary ...
108 109 Repaying the deficit The higher the deficit, the more money of a government’s budget is required in order to pay it off. ...
Public debt Public debt is the total amount of money owed by a country’s government, and includes historic debt. Nations with bi ...
Inflation can reduce debt Rising prices reduce the value of money, lightening the weight of debt repayment. ❯❯Public/national/so ...
NEWS Accountability How it works Democratic countries typically insist that governments report annually to their legislative bod ...
112 113 GOVERNMENT FINANCE AND PUBLIC MONEY Managing state finance TRANSPARENCY AND ACCOUNTABILITY IN CENTRAL BANKS Transparency ...
Attempting control Governments can attempt to manage the economy by adjusting policies such as taxes and influencing interest ra ...
114 115 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control DOMESTIC EXPENDITURE Amount spent by households, government, and ...
Reading economic indicators Measuring performance Indicators are usually shown as the rate of change over time, because the econ ...
116 117 GOVERNMENT FINANCE AND PUBLIC MONEY Attempting control How it works The main indicators governments use to monitor the e ...
Deciding on economic policy Calibrating the economic machine Governments have a number of different controls they can adjust to ...
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