What is meant by exogenous supply of money?

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2026-04-03 00:25

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Exogenous supply of money refers to the portion of the money supply that is determined by external factors or authorities, rather than by the market itself. This typically involves central banks or government policies that inject or withdraw money from the economy through mechanisms like open market operations, reserve requirements, or interest rate adjustments. In this context, the money supply is influenced by deliberate actions rather than being solely driven by demand and supply dynamics within the economy.

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