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It's not good because if you have too much money, you're probably going to spend it all. Pretty soon, you'll go broke. Or u could say, when local currency is over supplied, it will cause unnecessary inflation. The very basic idea is that when u got more money, u tend to spend more.
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∙ 15y ago
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What are the roles of money supply in the economy?
Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)
How increasing the money supply affects interest rates?
In general, increasing the money supply will decrease interest rates. Intrest rates reflect the amount paid for the use of money. As the money supply increases, money becomes relatively less scarce and easier to obtain. As with any other good as the supply increases, while demand remains constant, the price will fall. In this case the price of money is the interest rate.
Should the federal reserve control the money supply?
Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why the Federal Reserve regulates the banks to ensure that customers are protected and the country's economy is safeguarded.
How does raising the discount rate affect the money supply?
Decreases the money supply
What factors determine money supply?
factors which determine money supply is: open market operations, variable money supply bank rate policy.
Is it good to have over supply of money in the Philippines?
no...it will create inflation
What are the roles of money supply in the economy?
Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)
Is deflation of the money supply a good thing?
Deflation is a situation where the amount of the money supply is in a state of shrinking. It's a good thing if inflation is running high and out of control. In a normal economy, deflation means less money in circulation which causes the economy to suffer. Money is scarce and prices may be too high in relation to the money supply. This causes economic problems.
What are the roles of money in the economy?
Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)
How increasing the money supply affects interest rates?
In general, increasing the money supply will decrease interest rates. Intrest rates reflect the amount paid for the use of money. As the money supply increases, money becomes relatively less scarce and easier to obtain. As with any other good as the supply increases, while demand remains constant, the price will fall. In this case the price of money is the interest rate.
What is one way supply and demand can affect the price of a good?
WELL, by exchanging money
Should the federal reserve control the money supply?
Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why the Federal Reserve regulates the banks to ensure that customers are protected and the country's economy is safeguarded.
What is the average medical supply budget?
You should always keep a good amount of money for your medical supply. It depends on the size and quality of your medical services.
Dose a pantheists exalts money over God?
No but i see you exalt money over good grammar.
What is a group of people who wanted the new government to have a lot of control over the economy and the money supply?
Democratic
How does raising the discount rate affect the money supply?
Decreases the money supply
Do you have supply of money in India ppt?
there are four measure of money supply in india,
