10
votes
2answers
810 views

Who creates money? Central banks or commercial banks?

Which of these is a better description of money creation: Scenario 1: Central bank creates money Customer A deposits $10 at his bank. Customer B wants to borrow $100. The bank is in good standing ...
21
votes
10answers
12k views

Why do governments borrow money instead of printing it?

This question is raised in the movie Money as Debt (at time index 29:00). The answer that immediately pops to my head is "because printing money causes inflation". However, according to this movie, ...