Money in the U.S. is essentially debt of

Question

Quizplus · Accepted Answer

Money in the U.S. is essentially debt of the Federal Reserve System and the banks. The Federal Reserve System creates money by buying government bonds or other securities from banks, which in turn creates credit for borrowers. This credit is essentially debt, as it must be paid back with interest. Therefore, the money supply in the U.S. is based on the level of debt owed to the Federal Reserve and the banking system.

Money in the U.S. Is Essentially Debt of