Supply of Money Assignment Help

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Supply of Money:

Money supply or money stock refers to the total amount of money in the economy for purposes of policy various definitions or variants of money supply (e.g. M1, M2, etc)

Generally, the narrow money or narrow definitions refers mainly to the money used as medium of exchange while the broad money or broad definitions include money being used as a store of value.

In every country, the Central Bank always state which definitions of money it is adopting at any particular time and for which purpose. The quantity of money in an economy has direct effect on the price level and therefore on the value of money. Hence, to promote price stability and economic growth, the total money supply is subject to government control through the Central Bank in every modern economy.

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