Talk:Currency in circulation

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In other articles (on Wikipedia), the money supply is defined to be the currency in circulation PLUS the money held in demand deposit accounts. It is the latter makes up the greater part of the money supply. The currency in circulaton does not include demand deposits, but when examining money circulation they must be included. Also common sense tells us that circulation refers to money that is readily available to spend for consumers/businesses. Demand deposits are not only extremely high in money value, but are kept with the central bank at all times. Although they are not currency their status as being extreemy available to account holders (high liquidity) means that the circulation of money and not just of currency is the right way to view the macroeconomic situation of our society. Demand deposits do not receive interest in the same way as savings deposits do. Savings deposits are not money in circulation and do not have the same liquidity as cash reserves.Macrocompassion (talk) 16:10, 3 October 2011 (UTC)[reply]

The demand deposit can be used by a bank, but its use is generally a last-resort, either in times of financial crisis, or when the central bank decides to increase interest rates by selling the bank bonds, for which purchases the bank uses their cash reserves at the central bank. The central bank then takes that purchase price amount from the banks' demand deposit accounts, which reduces the money available to them. This depletion in demand deposits increases the need for inter-bank lending, and therefore interbank interest rates are increased. This in turn depletes the money in circulation since borrowers will borrow less (due to the higher interest rates).Macrocompassion (talk) 16:10, 3 October 2011 (UTC)[reply]

The explanation is incomplete and unsatisfactory. I have added a few introductory paragraphs including a diagram of the circulation within a closed macroeconomy in order to better define tha subject. Macrocompassion (talk) 16:10, 3 October 2011 (UTC)[reply]

The discussion within the article also should be edited out so that it is clear what is circulating and what is not. Deposit accounts contain money that does circulate over long time periods, so in my opinion it is necessary to mention the period of time over which different kinds of circulation occur including the deposit accounts money.Macrocompassion (talk) 16:10, 3 October 2011 (UTC)[reply]

Since the 'money in circulation' as we generally understand it, is different from demand deposits in practice it is the money in circulation that is of more significance, especially since the deposit demand account is likely to vary over a month from almost nothing to the full wages for that time period.Macrocompassion (talk) 16:10, 3 October 2011 (UTC)Macrocompassion (talk) 10:38, 16 August 2011 (UTC) Shushanto (talk) 15:09, 4 December 2010 (UTC)[reply]

Units

Surely it makes sense to translate this entire page into euros, since that is the biggest currency? — Preceding unsigned comment added by 46.226.49.232 (talk) 09:19, 30 August 2016 (UTC)[reply]