Money Supply

 

• This measures the amount of money in the economy
• M0 = the level of notes and coins in circulation + banks operational balances at the Bank of England (this is known as narrow money)
• M4 = notes and coins in circulation plus private sector deposits in banks and building societies

 

• Money must have 2 functions
• Medium of exchange
• Store  of value

Due to changes in the financial system the money supply has been difficult to measure accurately, this makes it difficult to implement Monetarism.

 

Essays and Revision Notes on Inflation

Definition - Inflation

Causes Inflation

Costs of Inflation

Monetarist Theory

Criticisms of Monetarism

Measuring Inflation

Problems Measuring Inflation

Money Supply

Hyperinflation - Causes and Costs

Inflation Essays

• Discuss the Difficulties of Controlling Inflation
• Does Devaluation Cause Inflation
• Should the Aim of the Government be to Attain Low Inflation?
• Explain What Can Cause a Sustained Increase in the Rate of Inflation
• Essay on Inflation - Is Inflation Harmful?