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A monetary system refers to the set of rules and institutions that govern the creation, circulation, and exchange of money within an economy. It includes the types of currency used, the mechanisms for regulating the supply and demand of money, and the systems for clearing and settling payments between individuals and organizations. The monetary system impacts the overall economic activity and plays a crucial role in determining the level of inflation, interest rates, and employment in a country. There are various types of monetary systems, including fiat, gold standard, and cryptocurrency systems.
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