Conditions of Money Supply
Do you know about the definition of money supply? You can define this term in several ways but the most important definition of this term is the total amount of money available at a specific period of time. This is the mostly used definition of money supply but some other definitions are also available. Some people also use the term currency to define this term. This term is used to elaborate the economy of a particular country at a specific period of time. Each year central bank of each country publishes the annual report of this currency supply.
There is a very close relation between money and price because the costs of products increase with money. When the amount of money will increase in any country then price will also increase along with. Therefore the relation between cost and money is directly proportional with each other. The role of central bank is very important to control and handle money supply in a country. Central bank regulates the incoming and outgoing of money similarly it also focus on current economical condition of country. Due to this reason the role of central bank is also important.
Central bank of each country prepares the rules and conditions of money supply as loan to customers. The conditions are different in various countries. Some countries make strict condition and policies about it. The credit history of customer is very important in this case because without credit history banks don’t give loan to anybody. If you have good credit history then bank will offer you personal loan on small interest rate. The relation of interest rate is directly related to credit history of any person. Therefore if you want to have personal loan then you need to have strong credit history for this purpose because it is important.