Money Supply

Money Supply

Can be measured in a number of ways, from a very narrow definition simply including notes and coins in circulation, to a much wider one which includes credit  . The reason why broad definitions are used is because goods and services can be bought on credit as well as with cash, and so that will affect overall spending power.

In the UK there are a number of ways in which the money supply is measured, the most common being ‘M0’, ‘M1’, ‘Sterling M3’ and ‘PSL2’. From the point of view of business, it is important that there is always enough money in circulation, but not too much.

Insufficient money leads to inconvenience, and ultimately the necessity to barter, whereas too much money leads to inflation. The judgement of how much money and credit to allow circulating is a difficult one, but should mirror the growth of the real economy.


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الأكاديمية العربية البريطانية للتعليم العالي في المملكة المتحدة بيت التعليم التخصصي المستمر المفتوح لكل أبناء الوطن العربي من المحيط إلى الخليج الراغبين بتطوير معارفهم العلمية وقدراتهم الوظيفية وفق أرقى معايير التعليم عن بعد في بريطانيا؛ وهي مؤسسة عمل خيري لا تهدف للربح، هدفها السامي الأوحد تقديم المعارف والعلوم الحديثة بطريقة ميسرة لكل ناطق بلسان الضاد.

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