Money Supply

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Money Supply

• Money Supply
• in
• Hong Kong

• Credit Creation
• Bank Multiplier

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Money Supply in Hong Kong
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Two Main Functions of Money

• Medium of Exchange
• Store of Value

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Medium of Exchange
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Store of Value
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Also Store of Value
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Money Supply in Hong Kong

• M1
• emphasizes the function of medium of exchange
• includes the coins notes in the hand of the
  public and demand deposits in LB.
• M2
• emphasizes the function of store of value
• includes M1 and Saving Time Deposits in LB.
• M3
• also emphasizes the function of store of value
• includes M2 and Deposits in RLB and DTC.

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• Notes coins in hands of public
• Demand deposits with LB

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• M1
• Saving and Time Deposit with LB
• Negotiable certificates of deposit issued by LB

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• M2
• Time Deposit with RLB DTC
• Negotiable certificates of deposit issued by RLB
  DTC

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P.C. Ed. 1996-97Major Economics

• Designed by
• Eric Leung