Does anyone know what are the short-run tools affecting money supply?

Question

pls. pls. help :)

Answer 1

The Federal reserve calls all of the shots. The Federal Reserve isn't even a Federal agency, it's just a name like Federal Express. You may look everywhere with economic experts, but the real experts only point the finger at one place, the Federal Reserve Board. If you want to find more, Google "Money Masters" and watch the movie.

Answer 2

Some factors could be everything that affects currency drains, excess reserves (absence of demand for borrowing), inflation expectations (people will tend hold less money).

Credit-promotion, deposit programs, interest rates.

Also money substitution effect could be mentioned - then people switch to another currency (currently this process is happening in some European countries), technological advances (credit cards etc.), seasonal demand for money (in some countries business activity has seasonal pattern)... etc.

Answer 3

When you talk about short-run tools affecting money supply, first of all consider:-

1.   The determination of interest rate and

2.   The role of uncertainty.

Answer 4

The answer will be nothing. The Federal Reserve has absolute control over the money supply.

However is the question is why is the Money supply affected you'll have to say.

If you want the dollar price to rise, remove money supply from the market.

If your hace inflation, release money supply to the market.