What is the circulation of money?
money circulation is the process of creating, distribution, collection and destroying currency. This is done to ensure that the country's citizens are available specific cash supplies and also ensured that the money in circulation is not defective or counterfeit. Each step of the process includes government officials and banks who cooperate, focus on the currency of paper and coins.
The first step in the money circulation process is actually printing banknotes, either as a coin or accounts. Many countries have a specific government department that can handle this function; In the United States, for example, the United States Ministry and the Federal Reserve are in charge of printing money. These offices determine how much money it must be available or “in circulation” for the general public. When there is too much money, these offices pull the currency out of circulation and when it is not enough, they print more. One example of this process will happen when the nation prints more money again that it is shopping for a festive season such as Christmas to take into account the added TransActions and then removed this currency after holiday.
The currency distribution is another part of the money circulation process. After coins and accounts are produced, they are usually sent to large government banks. In the United States, for example, they are known as federal banks. Private banks receive money supply they use to operate from these large banks, mostly on the credit system. Once the currency is held by the bank, it is distributed through ATMs and customer bankers. From now on, coins and accounts are used and reused for transactions by the general public.
After the money has been in the hands of the public for some time, anywhere from a few months to several years, it is ready to collect. In the circulation of money is the most common reason for the collection of Mutilation of Bills and Coins. Banks collect currency with cracks, tears and graffiti and return money to the federal bank. This also happens when banks are discovered notOr suspicious that a certain currency is counterfeit.
The destruction of unusable currency is the last step in the circulation of money. These older money is replaced by a newer currency and are considered worthless. Accounts are shredded by machines designed to handle a large number of accounts and in most cases sent to the landfill. As with any law created by the law, any destroyed account is carefully monitored to accurate understanding of the country's monetary position.