The Key Difference Between Money vs Credit Supply

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Feature Money Supply Credit Supply
Definition Total amount of money available in the economy, including cash and deposits. Total amount of funds available for borrowing in the economy, including loans and credit facilities.
Components Currency in circulation, demand deposits, savings, and time deposits (M1, M2, etc.). Bank loans, advances, credit cards, overdrafts, and other lending products.
Nature Actual liquidity held or readily available. Debt-based funding that creates future repayment obligations.
Controlled By Primarily controlled by the central bank through monetary policy tools. Controlled by commercial banks, financial institutions, and credit markets.
Impact on Economy Influences inflation, purchasing power, and liquidity in the market. Drives economic growth through business expansion and consumption.
Interest Involvement No interest involved in holding money itself. Always involves interest or repayment obligations.
Expansion Expanded through printing money or increasing reserves. Expanded through lending by banks and credit institutions.
Risk Lower risk; directly usable for transactions. Higher risk; includes credit defaults and repayment delays.
Example Cash in hand, bank account balances. Home loans, car loans, business credit lines.
money supply vs credit supply
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