Money supply is the component of __________ environment.

Economic

The correct answer is option (2) : Economic

Money supply is a key aspect of the economic environment because it directly relates to the supply of money within an economy, which has significant implications for economic activities, such as spending, investment, inflation, and overall economic stability.

The economic environment encompasses various economic factors, including money supply, interest rates, inflation, and fiscal and monetary policies, all of which influence economic conditions and business operations. Money supply is a crucial variable that impacts the level of economic activity and is therefore considered an integral part of the economic environment.