Grames Posted March 9, 2009 Report Share Posted March 9, 2009 (edited) In economics, money supply, or money stock, is the total amount of money available in an economy at a particular point in time. "In an economy" is interpreted as "within a country." But because the U.S. dollar and government securities are also held abroad in vast amounts, and traded around without returning to the U.S., is not any purely domestic measure of money supply too low? -edit: took my first sentence from Wiki Edited March 9, 2009 by Grames Quote Link to comment Share on other sites More sharing options...
Pokarrin Posted March 9, 2009 Report Share Posted March 9, 2009 (edited) I think that would depend on the context within which you are asking the question; if you intend to implement a gold standard, you would definitely have to know how many dollars there are in the world (physical and electronic) in order to determine a rational exchange rate. If you just want to determine what the current purchasing power of a dollar is within a single country, however, the number of dollars tied up in accounts and investments in other countries would tend to raise that number (at least temporarily). I'm sure somone else could give a more complete explanation, but that is my best current understanding. Edited March 9, 2009 by Pokarrin Quote Link to comment Share on other sites More sharing options...
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