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Results tagged with money-supply
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user 14137
Use for questions primarily related to the stock of money, either narrow money (MB or M0), and broad money (M1, M2, etc). This can also be used in questions related to the creation of money by governments and central banks, including questions related to models with a money market like IS-LM, where the supply is of importance.
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Why is money in circulation a liability of the central bank?
Balance sheets always balance, so assets equal liabilities.
Imagine a commercial bank goes to the central bank and wants cash. The central bank provides the cash, but asks for some of the commercial …
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