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In March 2020, the COVID-19 pandemic rocked economies worldwide. Millions of people lost their jobs, and many businesses struggled to survive or shut down completely. Governments responded with some of the largest economic relief packages in history the United States alone spent $2.2 trillion on a first round of relief. So where did all this money come from? Most countries have a central bank that manages the money supply and is independent from the government to prevent political interference. The government can implement many types of economic policy, like decreasing peoples taxes and creating jobs through public infrastructure projects, but it actually cant just increase the money supply. The central bank determines how much money is in circulation at a time. So why cant central banks authorize the printing of unlimited money to help an economy in crisis? They could, but thats a short-term solution that doesnt necessarily boost economic growth in the long-term, and can
