Money Supply

Money supply means the total amount of money available in an economy. In simple terms, money supply shows how much money is circulating or available to be used. Money supply is important because it can affect spending, inflation, credit growth, and financial conditions. Rapid money supply growth may support demand but can also raise inflation concerns. For example, cash, checking deposits, and other liquid forms of money can be included in measures of money supply. Money supply is not the same as government spending. Money supply measures available money in the economy, while government spending is money the government pays out for programs and services.