Why was the Bank of England created? How was it able to fund wars more easily? How different than before?
Answer:
the bank of england allowed money to be spent twice, by taking people's money and issueing promises to pay it back (basically invented paper money) this meant the goverment could spend the money it raised without raising any taxes, and yet people could go out and spend the promises (notes) issued to them by the goverment.
The Bank of England was created to manage the countrys income and expenditure.As the british Empire expande it was almost impossible to keep track of the countrys wealth, so a treasury was created to monitor more accurately the state of the countrys finances. On any given day, The Bank of England can state exactly how much money is in the treasury coffer, and what the forthcoming expenditure will be. The countrys income varies from day to day as money comes in from various taxes etc. and the Chancellor Gordon Brown is briefed every morning on the state of our finacial position.
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