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8: Money, Banking and Money Supply

  • Page ID
    45492
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    Banks are the front line of the financial system. Bank deposits are a form in which people hold their wealth and they are also the main means of payment, making them the main component of the money supply in the economy. Furthermore banks are the major sources of credit for households and businesses, either directly through bank loans or indirectly through the credit card systems they own.

    The financial sector provides the important link between and aggregate expenditure and aggregate demand. It is the key to understanding the slope and position of the AD curve. It also creates the framework for central bank monetary policy.


    8: Money, Banking and Money Supply is shared under a CC BY-NC-SA license and was authored, remixed, and/or curated by Douglas Curtis and Ian Irvine (Lyryx) .

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