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money supply |
Also found in: Financial, Wikipedia, Hutchinson | 0.02 sec. |
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money supply: see money money, term that actually refers to two concepts: the abstract unit of account in terms of which the value of goods, services, and obligations can be compared; and anything that is widely established as a means of payment. ..... Click the link for more information. . money supplyLiquid assets held by individuals and banks. The money supply includes coins, currency, and demand deposits (checking accounts). Some economists consider time and savings deposits to be part of the money supply because such deposits can be managed by governmental action and are nearly as liquid as currency and demand deposits. Other economists believe that deposits in mutual savings banks, savings and loan associations, and credit unions should be counted as part of the money supply. Central banks regulate the money supply to stabilize their national economies. See also monetary policy. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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While the divergence between the monetary base and the money stock continued to expand, the Bank of Japan's reluctant purchases of Japanese government bonds, "unconventional" assets like asset-backed securities and equities from the banks helped to change the composition of the monetary base. Nobel laureate Milton Friedman used to tell his students at the University of Chicago that as a theoretical argument, the liquidity trap didn't make much sense since the central bank can always expand the money stock. Even a large currency overhang would have only a small potential impact on the money stock of all eleven euro-countries. |
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