Money Supply Calculator

Formula

The formula to calculate the Money Supply (MS) is:

\[ \text{MS} = \text{R} \times \text{MM} \]

Where:

$\text{MS}$ is the money supply
$\text{R}$ is the change in reserves
$\text{MM}$ is the money multiplier

What is Money Supply?

The money supply is defined as the product of the change in value of the reserves and the money multiplier. It represents the total amount of money available in an economy at a specific time. Understanding the money supply is crucial for economic analysis and policy-making.

Example Calculation

Let's assume the following values:

Change in Reserves (R) = $1,000,000
Money Multiplier (MM) = 5

Using the formula:

\[ \text{MS} = 1,000,000 \times 5 = 5,000,000 \]

The Money Supply (MS) is $5,000,000.