If the fed credits Alex's checking account with $8,000 and Alex's bank decides to keep the entire $8,000 in the form of reserves instead of lending it out the money supply will increase by $8,000.
The total amount of money that can be used in a country's economy can be referred to as the money supply. The total amount of money, both in the form of cash and deposits that are readily convertible to cash, is included in the money supply.
The total amount of money and other liquid assets in an economy on the measurement date is known as the money supply. Both cash and deposits that can be accessed virtually as easily as cash are roughly included in the money supply. Through a mix of their central banks and treasuries, governments issue coins and paper money.
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