What is Money Supply❓
The total amount of Money and liquid assets in an economy on the current date is known as the money supply. Both cash and deposits that can be accessed almost as quickly as cash is roughly included in the money supply.
Why does Money supply Matter❓
The money supply is crucial because inflation will occur if the money supply increases more quickly than the economy's capacity to produce goods and services. Likewise, production may decline if the money supply does not widen fast enough, resulting in increased unemployment.
A country's level of the money supply is governed by its central bank. A central bank can implement actions that follow an expansionary or contractionary policy through its monetary policy. These measures are known as quantitative easing and quantitative tightening