ABSTRACT
This research work is
intended to evaluate the relationship between money supply and national income
in Nigeria during the period over view. View about the important of money in
the working of the economic varies greatly. In particular, the means by which money
affects income and output and the extent of the changes in money supply affect
the economy is the issue of such controversy.
Monetary policy deals
with discretional control of the money supply by the monetary authorities in
order to achieve desired economic good (of price stability, full employment
equilibrium and/increased production output). The policy aims at achieving some
specific objectives by influencing the quantity of money or the financial
system liquidity.
Such objectives include
the following to find out in quantitative terms, the actual relationship
between money supply and national income in Nigeria during the year overview.
The broad aim of these
specific objectives is to make appropriate policy recommendations.
From works consulted and
data gathered the searcher found out that issues of monetary policy have tended
to divided economist into monetarism and Keynesians. The researcher further
discovered that there are expansionary and contra dictionary monetary measures,
for controlling depression and inflation respectively.
Further, it was also
observed that money supply was a determinant factor in economic activity in
Nigeria. The research work was conducted using multiple regression and
statistical of variance procedure.
TABLE OF CONTENT
CHAPTER ONE
1.0
Introduction
1.1
Background of the study
1.2
Statement of the problem
1.3
Objective of the study
1.4
Significance of the study
1.5
Limitation of the study
1.6
Definition of terms
CHAPTER TWO
2.0
Review of related literature
2.1
Theoretical literatures
2.2
The quantity theory of money
2.3
Objective of the monetarist theory
2.4
Effect of an increase in money supply
2.5
Empirical literature
2.6
Factors that influence the level of money supply in an economic
CHAPTER THREE
3.0
Research design and methodology
3.1
Sources of data
3.2
Location of the data
3.3
Methods of data collection
CHAPTER FOUR
4.0
Findings
CHAPTER FIVE
5.0
Conclusion
5.1
Recommendations
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Views about the
important of money in the working of the economy vary greatly. In
particular, the means by which money affects income and output and the extent
to which changes in money supply (that is money stock ) affect the economy are
two issues that have given Nise to a major debate between two group of
economists distinguished by their adherence to two conflicting bodies of
economic theory called Keynesians and Monetarism.
The debate has been long
and complicated and has progressed through several stages over the years.
This debate is important implications for the effectiveness of monetary policy
and the importance of monetary policy relative to fiscal policy, in affecting
income, output, employment and the rate of inflation.
The relationship between
the stock of money and the level of income and output is fundamental to the
monetarism and Keynesians debate.
1.2 STATEMENT
OF PROBLEM
There have been a
thousand and one views on the relationship between money supply and certain
macroeconomic variables such as national income, price, and levels.
The controversy on the
on the rule of money vis-à-vis national income and price level has been going
on for quite a long time before the great depression of 1930s, economists
believed that increases in the quantity of money would lead to increases in the
price level (inflation).
However, during he great
depression group of economists emerged. They held that the important factor
caused income and employment to fluctuate is investment.
Thos group of economists
believed hat money is not an important determinant of the level of economic
activity while a separate group with a contrary view believed that money is an
important determinant of level of economic activity. They also believed that
once there is unemployment in the economy, increase in money supply. Leads to
increases in the level of income. This group of economist supported their
assertion with a lot of empirical evidence, base on the above analysis, a lot
of question arose.
These question include, is
money supply an important determinant of economic activity in Nigeria?
Furthermore, is there
any relationship between money supply and level of national income in Nigeria?
The above research questions form the problem of this research therefore; an
attempt would be made to ascertain the effects of money supply on the Nigerian
economy.
1.3 OBJECTIVE
OF THE STUDY
The specific objectives
of this research include the following: To find out whether or not there was a
relationship between money supply and the level of national income in Nigeria
during the period under review. The study also intended to investigation and
discover which of the views about the monetary theory holds in the Nigerian
context. It also ascertains to find out which of the monetary aggregates
affects economic more than the others in Nigeria.
1.4 SIGNIFICANCE
OF STUDY
This research work on
the relationship between money supply and the level of national income in
Nigeria would be of immense value t the central bank of Nigeria (CBN). The
result of the research would enable the central ban of Nigeria to reform it’s
primary function more effectively especially of regulating the amount of money
in circulation.
This research work would
enable the CBN to successfully and most efficiently carry on this function in
accordance with the prescribed goals, aims or objectives of the government.
Moreover, Nigeria
government or the ministry of finance, policy makers and even other researcher
has a lot to gin from this research. It would also benefit students, scholars
and the generality of the people who offer going through the various views and
theories about the role of money supply on the economic achieving.
1.5 DEFINITION
OF TERMS
Money supply simply
means the total amount of money in the economy at a given point in time.
National income is the
sum of all payments to factor of production. It includes compensation of
employees, rent, interest and profit. It is also known as Gross National
product (GNP) or Gross Domestic product (GDP).
In the other hands,
National income is defined as collective wealth of a nation.
Department | Banking and Finance |
Project ID Code | BFN0060 |
Chapters | 5 Chapters |
No of Pages | 25 pages |
Methodology | Null |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2348039638328 |
Contact Us On | +2347026816414 |
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