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MONEY SUPPLY

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THIS PDF IS ALL ABOUT DETERMINANTS AND MEASUREMENT OF MONEY SUPPLY. IT IS WRITTEN IN A VERY STUDENT FRIENDLY MANNER AND WHEN YOU WILL READ YOU WILL BE ABLE TO UNDERSTAND.

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MEASREMENT OF MONEY SUPPLY AND ITS DETERMINANTS
Money supply(M) = chequable deposits held by public in the commercial
bank(D) + currency in the hands of public(C)
Therefore, M = D + C
Money supply depends on the interactions between the activities of the public, commercial
banks, and the Central banks.

Supply of Money




Deposits with the commercial
Currency held by public banks




Reserve Bank Loan




Deposit of the commercial
Vault cash or Free Reserve bank with the central bank or
Required Reserve

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