Explanation:
There is no direct funding for the money supply throughout the United States. Paper currency, which has no innate value, has value just because people are able to acknowledge it in exchange for goods and services, particularly their labour work as workers. And people are prepared to consider paper as money although they know that someone else is willing to do so, too. Whether the monetary authorities were to print new notes at a rate well in excess of the available production, the appropriateness of paper money would be diminished. People would continue to think whether the banknotes would have been worth a lot after they were issued. Checks are part of the tax supply and are therefore not legal tenders, but consumers readily receive them from individuals considered to be trustworthy.
The purchasing power of capital is inversely correlated to the price point.
The Board of Governors of the Federal Reserve System (Fed) is capable of controlling the supply of money of the United States while the currency maintains its purchasing power.
