What Determines the Supply of Money?

2/13/01


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Table of Contents

PPT Slide

What Determines the Supply of Money?

Review of Money Creation

Goal of todayÝs class

Three Important Ratios

Developing the Money Multiplier Formula

Developing the Money Multiplier Formula (continued)

Developing the Money Multiplier Formula (continued)

PPT Slide

PPT Slide

What the Money Multiplier Formula Means

Who Affects the Money Supply?

Example 1

Answer to Example 1

Example 1 (continued)

Answers to Example 1 (continued)

Excess Reserves Ratio

Discount Loans and Interest Spread

Factors Determining Money Supply

Money Supply

Determinants of the Money Supply

Lessons learned from the graphs

Lessons learned (cont.)

Deposits at Failed Banks: 1929˝33

{ER/D}, {C/D}: 1929˝33

Money Supply and Monetary Base: 1929˝33

M2 Money Multiplier

Factors Determining M2

Author: Edward McPhail

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