ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The money supply is the sum total of all of the currency and other liquid assets in a country’s economy on the date measured. The money supply includes all cash in circulation and all bank deposits that the account holder can easily convert to cash.

Detailed explanation-2: -The total quantity of money in the economy at any one time is called the money supply. Economists measure the money supply because it affects economic activity.

Detailed explanation-3: -The Fed can influence the money supply by modifying reserve requirements, which generally refers to the amount of funds banks must hold against deposits in bank accounts. By lowering the reserve requirements, banks are able to loan more money, which increases the overall supply of money in the economy.

Detailed explanation-4: -The money supply is the total amount of money(currency+deposit money) present in an economy at a particular point in time. The standard measures to define money usually include currency in circulation and demand deposits.

Detailed explanation-5: -The M1 money supply is the narrowest or lowest level of the money supply of a nation. This is so because it includes only currency and coins in circulation, the traveler’s checks, and the checkable deposits.