What are the definitions of the money supply in economics?

Expert Answers
pohnpei397 eNotes educator| Certified Educator

There are three definitions that are used to measure the supply of money.  They are known as M1, M2, and M3.  M1 is the narrowest definition, including only the most liquid forms of money.  It measures currency, traveler's checks, and checkable deposits held at any given time.  M2 is slightly broader, adding "near monies" to M1.  It consists of M1 plus savings deposits, money market mutual funds, and time deposits (like CDs) of less than $100,000.  M3 is the most expansive definition.  It includes all of M1 and M2, and it also includes large time deposits of $100,000 or more.

sid-sarfraz | Student

Money supply is the total money in form of coins and notes in the economy, comprised by a country. It includes the money in private and public sector both which is in banks, reserves, savings, credit unions, etc. Money supply data is recorded and maintained periodically by the central bank of a country that involves the amount of total money present in the country.