Money supply
The money supply is the total amount of currency, checking deposits, and savings in the economy.
Contents |
Expanded Definition
The money supply can be broken down into categories, including:
- M1 = Circulating currency that's immediately available to purchase goods and services: cash, checking accounts, travelers checks ...
- M2 = M1 plus deposits or balances -- such as savings accounts or money markets -- that can quickly be converted into the M1 category.
- M3 = M2 plus money that can't be accessed immediately, such as that held by institutions.
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