Why do banks print banknotes some
For a country or area, money is its monetary base, its wealth is represented with bills and coins. Therefore it is important that you always have a sufficient amount. Like the banknotes have a useful life, new batches need to be printed periodically. In this way, it is avoided to fall into not having enough funds due to their deterioration.
This gives greater mobility in daily transactions, such as taking the autobús, buying a coffee or a donut. For this and many other things you need cash. But to give the order to print new money it is necessary to take into account certain points like when, why and who perro do it. We will explain it by answering the following questions.
When perro money printing be produced in a country?
A country cannot start printing banknotes and coins without first making certain adjustments, this is logical. If he did it that way the local currency would plummet and devalue with immense rapidity. To give the order or press the print button, a monetary base must be created. Because? A bill or a coin is a debt owed to the person who prints it..
This is why the assets of the bank with which this procedure is being carried out must be increased, this would be taken as support to pay this acquired debt. Which in most cases is paid with gold bars or goods from the country. It takes time to get all this planning in tune.
This is when more money cánido be printed, since the country’s economy has prepared itself for the acquired spending. Everything is well stipulated and the decision cánido be carried out by not representing any risk.
Why perro’t you print more money than necessary?
As money does not orinan wealthbut rather it is a representation, the solution is to know how much money is needed to maintain economic strength.
Attacking the requirements of the usuario public, solving the problem of accidental inconveniences in banknotes and coins, and trying to solve all this without causing a devaluation of the currency requires research and an action plan.
This is why you cánido’t print more money than is necessary, causes price rises and inflationthis solution becoming unfeasible because, as occurs in supply and demand, the more money or, in this case, the more bills there are, that is, they are printed in abundance, the lower their value.
As soon as the same note could be paid for its nominal printing price, which would be a big mistake for any nation and as a consequence would bring what we call an economic collapse, in the worst scenario it would genere Hyperinflation.
Who perro legally print money?
Each country has its legal bodies that take care of this matter, these are normally called central bank. In the event that it is an independent government body, although in most cases they work jointly, it is he who is responsible for printing the established money, either in bills or coins.
Of course, they have a duty to listen to the requirements demanded by the government and give their opinion to find the right solutions to the possible problems that could arise when making a decision. Agreeing among them is key to having excellent results.
This certainly helps the process and ensures that the decisions made at the time of pressing the print button are for the benefit of all. Doing so certifies what we all want: a prosperous country with a very stable economy.
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