Abstract
Most of us are accustomed to think of the supply of money as an important economic variable within a complete macroeconomic system. This money supply, combined with the availability of bank credit, is a principal determinant of economic activity. By affecting the amount of credit (or its cost in terms of the interest rate) made available by the banking system, the central authority (or the central bank) can implement its monetary policy objectives as far as the economy is concerned. Moreover, when bank credit is translated into loans and deposits, the money supply is correspondingly affected. In this way economic activity can, supposedly, be controlled.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
