Money supply

Opening up Money Supply Worries Dalton Paper Firm. JefFDonn, Associated Press, The Standard-Times, http //www.s-t.com/daily/04-97/04-13-97/f03bu299.htm... 

An effective transition of the nation s energy base from petroleum to alternate energy sources will require relatively large capital investments. Incentives to make these investments will be influenced by our nation s capability to control its money supply and execute a desired monetary policy. The United States faces the sobering task of designing a technology development plan and implementing it. Its development and implementation will require an effective United States monetary policy. 

Economists distinguish among currency (or hand-to-hand circulating media, which includes coins and bank notes), money equivalents (such as demand bank deposits and treasury notes), and commodities used as money (such as gold or silver bullion or consumables such as tobacco). In modern industrial societies, coins and paper money form only a small part of a nation s total money supply, money equivalents accounting for the larger portion of it. 

Examples of leading indicators include the trending (increases, decreases, or stasis—no change) with respect to the production workweek, building permits, unemployment insurance claims, the money supply, inventory changes, and stock prices. 

Figure 2 assumes growth in the money supply with the rise in the price level but this is not a necessary assumption to get these results. The initial demand function d is not necessarily the last one to the left. It could be one in the middle. Demand curves to the left of do would assume decreasing money income. Then the re-distribution occurs between the group with decreasing money income and the group with a sufficiently increasing money income. 

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