The creation of money occurs through a process known as the money supply. There are different ways in which money is created within an economy. Here are some key methods of money creation:

1. **Central Bank Money Creation**:
- Central banks, such as the Federal Reserve in the United States, have the authority to create money in the form of central bank reserves. These reserves are used by commercial banks to settle transactions among themselves.
- Central banks can influence the money supply through monetary policy tools, such as open market operations, reserve requirements, and dis