what is money supply?

Answer 1

United States

U.S. Money Supply from 1959-2006The most common measures are named M0 (narrowest), M1, M2, and M3. In the United States they are defined by the Federal Reserve as follows:

M0: The total of all physical currency, plus accounts at the central bank which can be exchanged for physical currency.
M1: M0 + the amount in demand accounts ("checking" or "current" accounts).
M2: M1 + most savings accounts, money market accounts, and certificate of deposit accounts (CDs) of under $100,000.
M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements.
As of March 23, 2006, information regarding M3 will no longer be published by the Federal Reserve. The other three money supply measures will continue to be provided in detail. On March 7th, 2006, Congressman Ron Paul introduced H.R. 4892 in an effort to reverse this change.[2]

Answer 2

Money supply is the amount of money supplied by a country.
In the US, there are calculations of money supply based on different criteria
there is M-1, M-2 and M3, .. I don't think the government publishes the M-3 numbers anymore , because it shows a much higher inflation rate.

Gov't controls money supply through manipulation of interest rates and the selling of Government treasury bonds

Answer 3

Money supply is an Economic variable in a country. It is the net stock of money available in a country at a time. There are many types of Money supply. M1 is the net cash meaning currency, coins and savings and checking account money available, M2 is the M1+ a part of Money market funds, M3 is M1+M2+the other part of money market funds and so on. Basically after M1 it is M1+ speculative money.
The equation PQ=MV shows that total Price level multiplied by Quantity of goods and service in an economy is equal to Money supply time Velocity of Money.

Answer 4

Money supply ("monetary aggregates", "money stock"), a macroeconomic concept, is the quantity of money available within the economy to purchase goods, services, and securities.

Money supply is important because it is linked to inflation by the "monetary exchange equation":

VELOCITY x MONEY SUPPLY = REAL GDP X GDP DEFLATOR

where:

velocity = the number of times per year that money changes hands (if it is a number it is always simply nominal GDP / money supply)
real GDP = nominal Gross Domestic Product / GDP deflator
GDP deflator = measure of inflation. Money supply may be less than or greater than the demand of money in the economy
In other words, if the money supply grows faster than real GDP growth (described as "unproductive debt expansion"), inflation is likely to follow ("inflation is always and everywhere a monetary phenomenon"). This statement must be qualified slightly, due to changes in velocity. While the monetarists presume that velocity is relatively stable, in fact velocity exhibits variability at business-cycle frequencies, so that the velocity equation is not particularly useful as a short run tool. Moreover, in the US, velocity has grown at an average of slightly more than 1% a year between 1959 and 2005.

Answer 5

I t means how much money or cash do you have that you can get to easily.

Answer 6

cash on hand