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Ynot
Lv 6
Ynot asked in Business & FinanceCredit · 8 years ago

When a country puts new banknotes into circulation who gains the face value credit?

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  • Robert M
    Lv 4
    8 years ago
    Favorite Answer

    Read http://en.wikipedia.org/wiki/Open_market_operation... to understand how central banks implement monetary policy. When the FED "increases the money supply" the FED doesn't actually get richer. What happens is that the money in your pocket is now worth less. On the flip side, your debts also become easier to pay.

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