Supply of money, Managerial Economics

Assignment Help:

The supply of money

Refers to the total amount of money in the economy.

Most countries of the world have two measures of the money stock - broad money supply and narrow money supply.  Narrow money supply consists of all the purchasing power that is immediately available for spending.  Two narrow measures are recognized by many countries.  The first, M (or monetary base), consists of notes and coins in circulation and the commercial banks' deposits of cash with the central banks.

The other measure is M2 which consists of notes and coins in circulation and the NIB (non-interest-bearing) bank deposits - particularly current accounts.  Also in the M2 definition are the other interest-bearing retail deposits of building societies.  Retail deposits are the deposits of the private sector which can be withdrawn easily.  Since all this money is readily available for spending it is sometimes referred to as the "transaction balance".

Any bank deposit which can be withdrawn without incurring (a loss of) interest penalty is referred to as a "sight deposit".

The broad measure of the money supply includes most of bank deposits (both sight and time), most building society deposits and some money-market deposits such as CDs (certificates of deposit).


Related Discussions:- Supply of money

Unemployment, Analysis of unemployment in relation to economics

Analysis of unemployment in relation to economics

Theory of consumer behaviour, Theory of Consumer Behaviour Through the...

Theory of Consumer Behaviour Through the study of theory of consumer behaviour we can be able to explain why consumers buy more at a lower price than at a higher price or put

With aid of evidence in the given article , with the of evidence comprehens...

with the of evidence comprehensively discuss the market structure in the south African mobile telecommunications industry

Theory of multiplier, income generation process through investment multipli...

income generation process through investment multiplier

Supply-side policies for unemployment, Supply-side policies Supply-sid...

Supply-side policies Supply-side policies are intended to increase the economy's potential rate of output  by increasing the supply of factor inputs, such as labour inputs and

Demand curve, Plot the demand schedule and draw the demand curve for the da...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.

Describe about theory of firm, Q. Describe about Theory of Firm? Theory...

Q. Describe about Theory of Firm? Theory of the firm is associated to comprehending how firms come into being, what are their objectives, how they act and enhance their perform

Oligopoly , why firms under oligopoly market should follow price rigidity...

why firms under oligopoly market should follow price rigidity?

Determine the theory of consumer behaviour, Theory of consumer behaviour ...

Theory of consumer behaviour The role of customers in an economy is of significant importance because consumers spend most of their incomes on services and goods produced by fi

A reduce in supply, a) A reduce in supply and an enhance in demand will cau...

a) A reduce in supply and an enhance in demand will cause the equilibrium:   b)  Which of the following is most likely to cause a reduce in the present demand for  some product X

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd