Money supply is a means used to purchase or sell goods or services. They are owned by institutional owners, individuals and countries. The structure of the money supply is as follows:
1) active assets that are used in circulation;
2) passive - accumulations, balances on accounts, etc. They can potentially go to the first group, and vice versa.
Money supply is a collection of funds,which determine the economy of a state. It includes, in particular, deposits, savings certificates, etc. In general, this is all that can be classified as finance that is in circulation in a certain country or area. This can include all means of payment.
In countries with a modern, developed economythe money supply is basically non-cash funds. These can include checks, payment orders, settlement documents, etc. Cashless money exists in the form of entries in the accounts of branches of central or commercial banks. This kind of finance is not a means of payment. However, it can be cashed at any time. This process is guaranteed by certain credit institutions.
In general, non-cash money has a number of advantages.
Cash money is a means thathas the right to issue only the state. However, not every country can afford to independently print banknotes and stamp coins. Therefore, some states transfer an order for the creation of currency notes to other countries. In addition, every five years, banknotes must be changed.
If the volume of money supply grows, it is not alwaysa negative phenomenon for the economy. For example, constant and moderate emissions, combined with increased production volumes, contribute to price stability. In itself, the volume of money supply is not a decisive factor in the economy.