Monetary policy affects aggregate demand and the economy through the money supply. For example, an increase in the money supply increases liquidity in the economy. As a result, more credit is available, and interest rates fall.
Money Supply
Money Supply: Meaning, Measures, Components, Monetary Policy Impacts
Money supply is the aggregate amount of money circulating in the economy. Its measures vary among countries and typically include cash, coins, and balances in current and savings accounts. Money supply measures and components There is no