Increase in the Money Supply

Definition

An increase in the money supply refers to the action taken by the central bank to inject more money into the economy, either by printing more currency or through open market operations. This leads to an overall increase in the amount of money available for spending and lending.

Related terms

Inflation: A general rise in prices due to an increase in the overall level of money circulating in an economy.

Monetary Policy: The actions taken by a central bank to manage and control the money supply and interest rates in order to achieve specific macroeconomic goals.

Liquidity: The ease with which an asset can be converted into cash without losing its value.