What changes the money supply?
What changes the money supply?
The money supply changes when commercial banks create credit, the central bank changes monetary conditions, or the government uses monetary financing. In an open economy, private international payments and foreign-exchange transactions generally transfer existing domestic money between holders rather than changing its total quantity.
Step-by-step lessons on CIE Intl A Level Economics 9.4.5 causes of changes in the money supply in an open economy. Each one builds up to exam-style questions.