M2 is a measure of the money supply that includes all elements of m1 as well as near money. M2 in nigeria and ghana is the broad money supply which measures the total. Hence, we can say that nature of money is one that facilitates exchange. Exchange has taken on different forms throughout history, starting with the barter system in the earliest centuries, where commodities were directly exchanged for each other. In this lesson, we also look at the money supply in terms of function and liquidity. There are three measures of money supply m1, m2, and m3. Spread the lovenature of money and evolution exchange is a way of life and money is an instrument that facilitates exchange. The measures of money supply in india are classified into four categories m1, m2, m3 and m4 along with m0. Money supply is defined as the total quantity of money circulating in the economy at a particular time. There are four measures of money supply in india which are denoted by m1, m2, m3 and m4. The supply of money means the total stock of money paper notes, coins and demand deposits of bank in circulation which is held by the public at any particular point of time. The federal reserve in the united states measures and publishes the. Money supply data is collected, recorded, and published periodically, typically by the countrys government or central bank. Pdf the effect of money supply in enhancing economic growth in nigeria and ghana is investigated in this study.
The definition of money supply given above represents a narrow measure of money supply and is generally described as m 1. M1 includes all currency in circulation, travelers checks, demand deposits at commercial banks held by the public, and. Many countries use it as an indicator of economic performance. M 1 is widely used as a measure of money supply and it is also known as aggregate monetary resources of the general public.
From april 1977, the reserve bank of india has adopted four concepts of money supply in its analysis of the quantum of and variations in money supply. Money can be defined as any medium which facilitates the exchange of goods and services between people. M 1 and m 2 are generally known as narrow money supply concepts, whereas, m 3. These four concepts of measures of money supply are explained below. However, barter continue reading concept of money and money supply macroeconomics.
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