Circulation of Money in the System and How Inflation is Created

The circulation of money is understood as a process of continuous monetary movement, supplying processes of goods and services circulation and capital movement. Circulation of money reflects directed money flow between the central bank and commercial banks; between commercial banks; between commercial banks and enterprises, institutions of different legal forms; between commercial banks and individuals; enterprises and individuals, between commercial banks and various financial institutions; between financial institutions and individuals. In countries with market economy monetary circulation consists of cash and bank (non-cash) money (Gartner). 

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