Monetary system is a system where the government provides money in a countries economy. Consists of a natural treasury, the mint, the central banks and the commericial banks.

Commodity money system. a commodity such as gold or seashells is made the unit of value and physically used as money

Commodity backed money. also known asa representative money. Many currencies have consisted of bank issued notes with no inherent value but can be exchanged for a precious metal such as gold.

Fiat Money. alternative to commodity money defined by the cenntral bank and government law as legal tender even if it has no intrinsic value. Originally was paper currency or base metal oinage, but in modern economics it ainly exists as data such as bank balances and records of credit or debit card purchases and the fraction that exists as note and coins is relatively small. money is cmostly created by banks when they loan to customers. Banks lending currency to currency to customers sibject to each banks regulatory lmit, is the principal mode of new deposit creation.

Congress established three key objectives for monetary policy in the fed reserve act, maximizing employment, stabilizing prices and moderating long term interest rates.