Glossary · Economics and finance

What is Money supply?

Also known as: money stock

The total amount of money available for spending in a country's economy: cash in circulation and funds in various accounts at banks. It is measured with several "monetary aggregates": a narrow aggregate covers only the money that can be spent most quickly, while a broad aggregate also includes less liquid funds such as time deposits; the composition of aggregates differs from country to country. The central bank influences the growth of the money supply through monetary policy; if it grows faster than the volume of goods and services, the risk of inflation increases.

Source: The Britannica Dictionary: money supply; Corporate Finance Institute: definitions of money

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