How is money made?

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Anonymous49816
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Just out of curiosity, how is money created? For example, how would the total amount of money in the world go from £100 to £200? Of course you can't just print more banknotes as that causes inflation so how is this idea of money created?
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Quady
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You can just print more banknotes / virtual money.

It desnt always cause deflation, look at Japan.
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tinygirl96
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ask the bank
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martin7
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(Original post by Anonymous49816)
Just out of curiosity, how is money created? For example, how would the total amount of money in the world go from £100 to £200? Of course you can't just print more banknotes as that causes inflation so how is this idea of money created?
You can just print banknotes or create virtual money. This is what has been happening in Britain/US/Eurozone for the past few years with "quantitative easing".

You do have to be careful with this; if you create too much money then you will get problems with inflation. But the amounts created in Britain/US/Eurozone so far have not caused this.

I'm certainly not an economist, but my understanding is that having low levels of inflation (around 2%) is good; having higher levels isn't good; having really high inflation is really not good at all. Also, having negative rates of inflation (also known as "deflation") is also a problem.
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