Modern monetary systems are today followed in all the major countries of the world. this system contains the holders of money including businesses and governmental units; commercial banks which are privately or government-owned), which works through a network of borrowing in the form of deposits, giving loans to individuals, firms, or governments, and thirdly there are central banks, which have a monopoly on the issue of certain types of money and has the power to determine the quantity of money. There are two ways in which the public hold money which is in the form of cash and bank deposits.
How Modern Monetary System has changed the economy?
In a monetary system, the central bank issues currency to the public which is used for the exchange of goods and services domestically. In order to make purchases internationally, the currencies other than the dollar has to be converted. Not only currency but bank deposits, credit and debit cards also play a vital role in the monetary system economy. Bank deposit is not the money that an individual gives to the bank but instead, that money is used for other tasks as well. For example, banks give out loans and the system goes on. Credit cards are not money but that piece of the card shows that you have money and you have the ability to buy things in any market.
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