Question

What is a good monetary system?

Answer 1

The system of country’s government through which the economy gets money is a monetary system. Such systems are as below:

1) Printing: Money could be printed in a mint and then could be circulated in the economy.

2) Regulations: The government can regulate the whole economy by making policies (like monetary policy, fiscal policy, etc). Such regulations create money supply in the market.

3) Demonetization: If the whole currency or a particular denomination of currency is stopped circulating in the economy then this is demonetization. It helps to tap black money.

There is no good or bad. Each system has its own implication and required as per the situation demands. If there is expansion, the regulation would be low; if there is uncontrollable inflation, demonetization would be the best.