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In economics, money supply is the total amount of monetary asset available in an economy at a
specific time. However if supply of money is not carefully controlled, it can have a negative
effect on economic growth. If there is excess supply of money then the result will be inflation
whereas tight control over money may cause depression and unemployment. So, monetary policy
is implemented by central bank to control total money supply.
Graphically, the supply curve for money illustrate the quantity of money supplied at a given
interest rate. Supply curve for money is vertical because it does not depend on interest rate rather
it is decided by central bank.
Source:
N. Gregory Mankiw. 2016. Principles of Economics (Eight Edition)