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22 December, 04:40

Why do economists study the money supply? Be sure to mention liquidity in your response.

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  1. 22 December, 05:04
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    The money supply is the total amount of money available in an economy at any given time. It's important to study this supply so that we can understand how accessible money is in our system. Because money can exist in different forms and in different kinds of accounts, it can be more or less liquid.
  2. 22 December, 05:10
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    Economists measure the money supply because it's directly connected to the activity of taking place all around us in the economy world. the M1 is the narrowest definition of money. M1 consists of coins and currency, checking accounts and traveler's checks.
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