How the Federal Reserve Increases Money Supply

To understand how the Federal Reserve increase money supply, it is important to first understand the meaning of money supply, which we will think of as: money which is available (in the economy) for use. Second, you must remember the three parties that influence the money supply:  The Federal Reserve Banks Households that deposit money It will…

Read More

The Inverse Relationship between Bond Prices and Bond Interest Rates

Bonds are considered less risky forms of investments than stocks, as the former does not have the same volatility as the latter has. It represents a promise to pay when the indebted entity, the bond issuer, borrows money from a buyer of the bond, the bondholder. Bonds are used by the government and private companies…

Read More