Question

4. Define money supply and explain its components.​

Answer 1

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Supply of Money: Money supply means the total amount of money in an economy. The effective money supply consists mostly of currency and demand deposits. ... Some economists also include near money, or such liquid assets as savings, deposits and government bills in the money supply.

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Answer 2

Supply of Money: Money supply means the total amount of money in an economy. ... Some economists also include near money, or such liquid assets as savings, deposits and government bills in the money supply. The total supply of money is determined by banks, the Federal Reserve, businessmen, the government and consumers.