money supply
Học thuậtThân thiện
Definition
Noun: - The total amount of monetary assets available in an economy at a specific time: This includes physical currency (coins and banknotes) in circulation and the balances held in checking and savings accounts that are readily accessible for spending.
Usage
The term "money supply" is a key economic indicator used by governments and central banks to analyze and manage economic activity, inflation, and interest rates. It is typically measured in different aggregates (e.g., M1, M2).
Examples
- The central bank announced measures to increase the money supply to stimulate the sluggish economy.
- Economists are concerned that the rapid growth in the money supply could lead to inflation.
- A contraction in the money supply often coincides with higher borrowing costs for businesses.
Advanced Usage
- "To expand/contract the money supply": Refers to the actions of a central bank to increase or decrease the amount of money in the economy, often through monetary policy tools like open market operations or adjusting reserve requirements.
- The Federal Reserve decided to expand the money supply by purchasing government bonds.
Variants and Related Words
- Monetary aggregate (n): A formal measure of the money supply, such as M0, M1, or M2.
- M1 is a narrow monetary aggregate that includes physical currency and demand deposits.
- Liquidity (n): The availability of liquid assets (including components of the money supply) in an economy or market.
Synonyms
- Monetary stock
- Money stock
Related Terms and Concepts
- Monetary policy (n): The process by which a central bank controls the money supply, often to achieve macroeconomic stability.
- Interest rate adjustments are a primary tool of monetary policy.
- Inflation (n): A general increase in prices, which can be influenced by changes in the money supply.
- An excessive money supply growth is often a precursor to inflation.
Noun
- the total stock of money in the economy; currency held by the public plus money in accounts in banks