How does the Government decide how much money is printed every year?



  1. 0 Votes

    Money today has no physical value (such as years back when every dollar was backed by gold or silver), it is backed by peoples belief in the federal reserve to uphold each bill at its face value (thats the federal reserve not).

    Monetary policy is based on many factors, including exchange rates, interest rates, economic indicators (such as GDP), and overall money demanded by the economy. If the interest rate is higher, people will demand less money and be more willing to save it to invest, so less money needs to be printed. With lower interest rates, people would rather consume than save, so more money has ot be printed.

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