Apr 21 2012

Money supply

The vertical curve representing the total supply of reserves in a nation’s banking system. Determined by the monetary policy actions of the central bank. Increases (shifts to the right) lead to lower interest rates and are the result of expansionary monetary policies. Decreases (shifts to the left) lead to higher interest rates and are the result of contractionary monetary policies.


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author
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