| Whether endogenous or exogenous, money supply is a very important problembecause it decides the macro policy of a country. The article reviews the history ofChinese financial policies and the main theories home and abroad. At last the authoranalyzes the main factors of Monetary Base and Money Multiplier. From that, theauthor gets the result that M0 and M1 have endogenous and M2 is not apparent. Thenwe concludes that the policy to control M2 is feasible. At last, the article put up threepieces of advice: one is to improve the exchange rate and develop open marketoperation; the second is to master the rule of credit and make full use of interest rate;the last is to rebuild the market subject and expedite the control of market. |
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