Enter the change in reserves and the money multiplier into the calculator to determine the money supply.
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Money Supply Formula
The following formula is used to calculate a money supply.
MS = R * MM
- Where MS is the money supply
- R is the change in reserves
- MM is the money multiplier
Money Supply Definition
Money supply is defined as the product of the change in value of the reserves and the money multiplier.
Money Supply Example
How to calculate the money supply?
- First, determine the change in reserves.
Calculate the total change in reserves of a country.
- Next, determine the money multiplier.
Calculate the money multiplier to be applied to the reserves.
- Calculate the the money supply.
Using the formula, calculate the money supply.
A money supply is a measure of all of the liquid instruments and currency of a countries economy.
Usually, cash and cash equivalents such as deposits that can be used as cash are considered in the money supply.