Monetary policy transmission mechanism M (money supply) E (output) I (investment) Y (national income).

Money supply; ; Money supply), output (equilibrium), investment (input) and national income (rate of return).

1, money supply (money supply; Money supply)

Also known as money stock and money supply, it refers to the amount of money circulating in a certain period of time. Money supply is one of the main economic statistical indicators compiled and published by central banks in various countries. At present, China's money supply statistics are based on days. The so-called amount of money on a certain day in a certain year is actually the amount at the end of the daily business of banks that handle money business.

2. Output (output, balance)

Output refers to all kinds of useful goods or services created in the production process, which can be used for consumption or further production. The output is mainly used for consumption or further processing of various useful goods and services. Let's take a look at the making of a pizza. Delicious pizza is its output. In education, educated and knowledgeable citizens are the output.

3, investment (investment)

Investment refers to the process that countries, enterprises and individuals sign agreements with each other for the specific purpose of promoting social development, realizing mutual benefit and transferring funds. It is also an economic behavior that a specific economic entity invests a sufficient amount of funds or physical currency equivalents in a certain field in a certain period of time in order to obtain income or capital appreciation in the foreseeable future.

4. National income (income)

It refers to the value created by workers in the material production sector in a certain period of time, and it is the sum of wages, interests, rents and profits obtained by the owners of a country's production factors (including land, labor, capital and entrepreneurial talents). ) received within a certain period of time.

Extended data:

The function of monetary policy ranges from policy means to operational goal, to effect goal, and finally to the way and transmission process of the ultimate goal. Monetary policy is divided into two processes: formulation and implementation. The formulation process starts with determining the final goal, and then determines the effect goal, operational goal and policy means in turn.

The implementation process is just the opposite. First, starting with the operation of policy means, it directly affects the operational objectives, and then affects the effect objectives, and finally realizes the ultimate goal of monetary policy. In western economics, the transmission mechanism of monetary policy can be divided into four ways, namely, interest rate transmission mechanism, credit transmission mechanism, asset price transmission mechanism and exchange rate transmission mechanism.

References:

Baidu encyclopedia-money supply

Baidu Encyclopedia-Output

Baidu encyclopedia-investment

Baidu Encyclopedia-National Income