Money Supply and Inflation
Supplying the money in the market is the sole responsibility of the central bank of the country (Reserve Bank of India in case of India). RBI prints the currency and supplies money in the economy. Coins are minted by the Ministry of Finance but circulated by the RBI in the whole country. Supply of money decides the rate of inflation in the economy. If supply of money increases in the economy then inflation starts rising and vice versa. Indian Economy Supplying the money in the market is the sole responsibility of the central bank of the country (Reserve Bank of India in case of India). RBI prints the currency and supplies money in the economy. Coins are minted by the Ministry of Finance but circulated by the RBI in the whole country. Supply of money decides the rate of inflation in the economy. If supply of money increases in the economy then inflation starts rising and vice versa. The currency issued by the central bank is in fact a liability of the central bank and the govern...