Notesale: Turn your study into money

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Cezanne Kooter
Macro Economics

The Money Supply
M1, M2 and Supply & Demand
The money supply is usually referred to as a group of safe assets that
households and businesses can use to make payments or to hold as shortterm investments
...
The money
supply can include cash, coins, and balances held in checking and savings
accounts
...
Money supply data
is collected, recorded and published periodically, typically by the country's
government or central bank
...
In the US, the Federal Reserve policy is the most
important deciding factor in the money supply
...
Two of
them are called M1 and M2
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e
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), and the transactions at institutions such as
commercial banks, savings and loan associations, savings banks, and credit
unions
...
M1 measures the components of the
money supply that are most liquid, i
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the components that are the quickest to
be converted to currency
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Whenever someone makes a purchase, for example, buying clothes,

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15th of March

Cezanne Kooter
Macro Economics

The Money Supply
M1, M2 and Supply & Demand
he/she can pay with coins, cash(paper), or transfer with bank card
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In the M2 measurement, M1 is included plus the savings deposits,
small-denomination time deposits (those issued in amounts of less than
$100
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Those deposits are
also called "near money", since it is not as liquid as money that is included in
M1 (cash, coins, debit cards)
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It is a broader money classification than M1, since
it includes both assets cash, and savings
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Over a few periods, measures of the money supply have shown to be
quite connected together with important economic variables such as the GDP
and the price level
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At times, financial institutions such
as national banks use the money supply as an important guide in the
monetary policy conduct
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The Central Bank holds interest rates constant during a period of
inflation
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15th of March

Cezanne Kooter
Macro Economics

The Money Supply
M1, M2 and Supply & Demand
Bibliography
F
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Current FAQs Informing the public about the Federal
Reserve
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federalreserve
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htm

M1 Definition | Investopedia
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Retrieved March 07, 2016, from
http://www
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com/terms/m/m1
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(2003)
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investopedia
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asp

Money Supply Definition | Investopedia
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Retrieved March 07, 2016,
from http://www
...
com/terms/m/moneysupply

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