What factors impact money supply?

The money supply within an economy is influenced by various factors that can affect its quantity and availability. One key factor is the actions of the central bank, which has the ability to increase or decrease the money supply through monetary policy measures such as open market operations, reserve requirements, and interest rates. Additionally, fiscal policy decisions made by the government, such as changes in taxation and government spending, can also influence the money supply. Other factors include changes in the level of economic activity, financial intermediation, and the willingness of banks to lend. Overall, a combination of both monetary and fiscal policies, as well as economic and financial conditions, play crucial roles in shaping the money supply of an economy.

This mind map was published on 4 October 2023 and has been viewed 91 times.