money supply

money supply
the sum of demand or checking-account deposits and currency in circulation.
[1875-80]

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Liquid 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.

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      the liquid assets held by individuals and banks. The money supply includes coin, 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 involved in aggregate economic activity. These deposits 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.

      The Federal Reserve Board in the United States and the Bank of England in the United Kingdom regulate the money supply to stabilize their respective economies. The Federal Reserve Board, for example, can buy or sell government securities, thereby expanding or contracting the money supply (see monetary policy.

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Universalium. 2010.

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