What would you like to do?
What determines the amount of money a country can print?
A countries central banking system generally decides what amount of money a country can print. Contrary to popular belief, gold or precious metals are irrelevent and uncessary to give money a value. The only reason that gold (or other metals) have value is because people have accepted them as having value. Just as people may accept that an apple might have some sort of value or a banana might have some sort of value. Gold (and other metals) are a scarce resource and therefore had been accepted as a medium of echange long before paper money.
A medium of echange is necessary for two reasons.
1. People need to have a base from what to compare things to. That is, it is difficult to determine how many apples equal a banana or how many cars equal an airplane for example. We do however know that say an apple is worth $.50 and a banana is worth $.75.
2. People need a way to store their productive efforts so that they can be used in the future as necessary.
A country should generally wish that their paper money is still a scarce resource (that is the country's bank controls the amount printed and makes it difficult to copy). In this way money can be used to reimburse an individual for his production efforts and then he or she can use this money to pay someone else for producing something else they don't have but they need.
Generally speaking a reputable country will produce enough bills and coinage to 'meet demand' - naturally money is always 'in demand' so this means replacing bills damaged through use. In the case of the US it should be noted that most 'money' doesn't exist in the form of money, and as a matter of fact most currency is actually held outside the country by foreigners.
If too much money is printed or created holders may fear loss of value from dillution and start selling dollars to buy the currency of other countries. Like a stock the dollar will fall until foreign investors support it by buying American food, corporations, resources, and goods and services again.
105 people found this useful
Was this answer useful?
Thanks for the feedback!
it costs money to print money and it costs a lot of resources they can but the last time a country just decided to print money was Germany diuring world war 1 the more money …a counntry prints the less the money is worth in Germany during world war 1 they printed so much more money to reverse the war debt that they cased inflation which is more money of less value because of the inflation people would take a wheelbarrow full of money just to buy a loaf of bread and some milk because the money is so worthless.
1) Demand for money (economy growth etc.) 2) Monetary policy of central bank. So these two sides come into equilibrium decision of money supply. More strictly local …currency is supplied by central bank - and demand for money is secondary (of course with some issues).
Gold reserves are part of the economic strength which gives the cover for paper money - but not by law - this was cancelled for most countries
The amount of paper money a country can print depends on the country. Normally countries do not print more then what they have in gold but it depends on how much the peopl…e in the country believe in the worth of the money.
Not all countries print their own money. A country can only print money if it is in control of its currency like Japan and the US. One country that cannot print money is G…reece because they are not in control of the Euro.
It's called the balance of trade. Right now the US has a negative balance of trade with the rest of the world because we buy more goods (oil, Chinese imports, etc.) than we se…ll or export.
Your total amount of your all of your worldwide taxable income on your 1040 income tax return from all sources is the amount that will be used to determine your federal income… liability for year after the income tax return is completed correctly.
The first country to print paper money was China.
countries not presently printing money
It depends on whether it has been copy-righted and whether they have permission. For example, the Australian Mint prints money for several countries (under licence) including …Australia. These other countries are island nations such as Fiji who don't have the infrastructure to print their own 'high tech' anti conterfeiting money. Many countries 'copy' the basic design of a country that once ruled over them. British money is probably the most copied around the world due to Britain having had the biggest empire. The name of British money has also been copied and the currency Pound, shilling and penny are still used in various countries. The currency Dollar most likely came from the European Dolare (I think it was originally Spanish) and the word is used in many countries including U.S.A.
money circulated in the market and printed is pegged to the gold to avoid any escalations/devaluation of money. For example if you print $100 then gold worth of $100 will be p…laced in the bank or institution which releases money. This avoids a situation in which currency is no longer honored or gets inflated
It's deterimed by the Federal Open Market Committee, which is part of the Federal Reserve System.
We don't print an infinite amount because that would generate inflation. If we printed an infinite amount of money, the currency would become cheap and worthless.
Countries can print more money, and they do! However if they print too much money, then its value falls (as with anything having an excess of supply) triggering inflat…ion. One of the worst examples of this was post World War 1 Germany, where they printed enormous amounts of money (even going so far as to reprint higher denominations over existing bills) to pay the reparations to the Allies demanded in the treaty of Versailles. The result was a rampant exponential inflation followed by a depression that spread virtually worldwide, becoming the "Great Depression" when it reached the United States. This inflation/depression was a significant factor in the rise of Adolf Hitler's political power and the start of World War 2.