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But suppose money did not exist. How would one pay for the things one wants?
How is money created?
Money is created in two ways: First, money creation comes from borrowing it and spending it. Second, it can simply be printed up "out of thin air" by a central bank. The U.S. economy and other modern economies have central banks. Central banks have two major powers. Central banks may establish the nominal level of short-term interest rates, and purchase assets such as government debt, with newly printed money. When the central bank establishes short-term interest rates at a low level, it greatly encourages corporate and individual borrowing and spending...
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