CHAPTER 4
Supply of Money
“Money supply” is the pool of liquid assets that can be used to make payments. The amount of money is determined through a complicated process involving the public, the depository financial institutions, and the central bank of the country. The financial market for securities and the demand for and supply of money are closely related. Public and private sector analysts have long monitored the changes in money supply because of its effects on the rate of interest, the price level, inflation, the exchange rate, and the business cycle.
In economics, money supply or money stock refers to the total amount of monetary assets available in an economy at a specific point of time. There are various concepts of money supply based ...
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