how the m1 money supply changes
governments intentionally change the money supply to have residual impacts on the broader economy for example in response to the covid 19 pandemic governments increased the m1 money supply making it easier to come about capital to help stimulate the economy keep workers employed and encourage business activity 8central banks can increase the m1 money supply by increasing the amount of physical currency in circulation lending money to banks or purchasing securities on the open market on the other hand as seen in the aftermath of covid 19 central banks reverse these policies to cool the economy to fight inflation businesses and consumer spending also have an impact on the m1 money supply as consumers and businesses spend more money they create greater demand for that local currency therefore as consumers write checks use debit cards or use credit cards the m1 money supply increases 