Financing the Economy I. Introduction to Financing the Economy Finance is the study of moving money from those who have it, but don't want to spend it, to those who want to spend it, but don't have it. Finance occurs at two levels. Macro finance studies the creation and destruction of money, the institutions which move money from one person to another, how rapidly money is moved, and how policy makers can change the amount of money and its movement to achieve maximum employment, maximum growth, price stability, and equilibrium in the balance of payments accounts. Micro finance studies how individuals, institutions, governments, and businesses acquire, spend, and manage money. Personal finance is when individuals acquire, spend, and manage money.
Business finance is when businesses acquire, spend, and manage money.
Public finance is when governments acquire, spend, and manage money. International finance is when money moves in and out of a country. This book concentrates on macro finance. It shows how money is created and destroyed and differentiates money from all other financial resources. It examines how money moves through the economic system, how money moves through the financial system, and how the movement of money through the financial system affects the economy.