According to the monetarist theory, the money supply is the most important factor determining the rate of economic growth.
It is regulated by MV = A PQ formula in which M = money supply, V = velocity of money, P = the price of the item, and Q = quantity of goods and services.
The Federal Reserve controls money in the United States and uses three main levers - the reserve ratio, the discount rate, and open market operations - to increase or decrease the money supply in the economy.