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Lecture Money and banking - Lecture 30: The Government's bank

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The central bank started out as the government’s bank, originally created by rulers to finance wars. However, the early examples are really the exceptions, as central banking is largely a 20th century phenomenon. The central bank creates money and thereby controls the availability of money and credit in a country’s economy. In today’s world, central banks use monetary policy to stabilize economic growth and inflation.
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Lecture Money and banking - Lecture 30: The Government's bank

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