Active Money

DEFINITION of 'Active Money'

The total value of coins and paper currency in circulation amongst the public. The amount of active money fluctuates seasonally, monthly, weekly and daily. In the United States, the Federal Reserve Banks distribute new currency for the US Treasury Department. Banks lend money out to customers which becomes classified as active money once it is actively circulated.

BREAKING DOWN 'Active Money'

Active money is all the coins and paper currency in the hands of the public. Due to the high demand from abroad, the majority of US cash in circulation is outside of the United States. The variable demand for cash equates to a constantly fluctuating active money total. For example, people typically cash paychecks or withdraw from ATMs over the weekend, so there is more active cash on Monday than on Friday. The public demand for cash declines at times - following the holiday season, for example.

RELATED TERMS
  1. Currency In Circulation

    Currency that is physically used to conduct transactions between ...
  2. Monetary Base

    The total amount of a currency that is either circulated in the ...
  3. Trillion Dollar Coin

    A trillion dollar coin is a theoretical coin that could be legally ...
  4. Gresham's Law

    A monetary principle stating that "bad money drives out good." ...
  5. Federal Reserve Note

    The most accurate term used to describe the paper currency (dollar ...
  6. Currency

    Currency is a generally accepted form of money, including coins ...
Related Articles
  1. Economics

    How Central Banks Control The Supply Of Money

    A look at the ways central banks pump or drain money from the economy to keep it healthy.
  2. Forex Education

    The History Of Money: Currency Wars

    Find out how conflicts have changed the role money plays in our lives.
  3. Economics

    How Currency Works

    Currency offers key advantages over economies based on direct trade. It provides sellers with a broader market for their goods and services, and provides a durable asset with which people can ...
  4. Economics

    Understanding How the Federal Reserve Creates Money

    Read about how the Federal Reserve actually targets and creates new money in the economy, and find out why the savings and loans system magnifies this process.
  5. Personal Finance

    The Banking System: Commercial Banking - Economic Concepts in Banking

    ByStephen D. Simpson, CFA Banks both create and issue money. While commercial banks no longer issue their own banknotes, they are effectively the distribution system for the notes printed, and ...
  6. Forex Education

    The History Of Money: From Barter To Banknotes

    Money has been a part of human history for at least 3,000 years. Learn how it evolved.
  7. Economics

    Understanding Money Supply

    Money supply – also called money stock -- refers to the total amount of currency and other liquid financial products in an economy at a particular time.
  8. Economics

    Macroeconomics: Money And Banking

    By Stephen Simpson TMoney can be thought of as any good that is widely used or accepted in the transfer of goods and services. Today, there are three common forms of money in use. Commodity ...
  9. Savings

    Teaching Financial Literacy To Kids: What Is Money?

    Teach your kids what money is and how it works, from bartering, to cash and coin to the concept of credit.
  10. Economics

    Understanding Operating Activities

    Operating activities are the daily processes conducted by a company to generate income.
RELATED FAQS
  1. Who decides when to print money in the US?

    Learn who decides to print money in the United States. Many people relate credit creation, which is the Fed's job, with printing ... Read Answer >>
  2. What impact does the Federal Reserve have on a bank's profitability?

    Learn how the Federal Reserve impacts a bank's profitability with its influence on the discount rate, federal funds rate ... Read Answer >>
  3. How should I evaluate a company with negative cash flow investing activities?

    Understand how a negative cash flow from investing activities should be evaluated. Learn the sources and uses of cash in ... Read Answer >>
  4. How can I use cash flow investing activities to determine if a company is growing?

    Learn how to use the sources and uses of a company's cash flow from investing activities to determine whether that company ... Read Answer >>
  5. Is all paper money fiat money?

    Learn how the United States has converted from a gold-backed money system to a fiat one. Learn what is considered fiat money ... Read Answer >>
  6. Why should I dig further if I find a company has positive cash flow from investing ...

    Understand why it's important to dig into a company's sources and uses of cash if it has a positive cash flow from investing ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center