- In macroeconomics, the money supply is the quantity of money in circulation that an economy has at a time.
- Money supply can be defined as the quantity of the currency in circulation.
- Each country may use the definition that best makes sense to them.
- It affects the inflation.
- If the money supply rises, inflation rises.
- If the money supply decreases, inflation decreases.
Why does inflation increase/decrease if the money supply increase/decrease?
Are there other definitions of the money supply besides "quantity of the money in circulation"?