A STUDY OF THE RELATIONSHIP BETWEEN MONEY SUPPLY AND LEVEL OF NATIONAL INCOME IN NIGERIA

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.