money supply

money supply
/'mʌni səˌplaɪ/ noun
the amount of money which exists in a country
COMMENT: Money supply is believed by some to be at the centre of control of a country’s economy. If money supply is tight (i.e. the government restricts the issue of new notes and reduces the possibility of lending) the amount of money available in the economy is reduced and thus may reduce spending. Money supply is calculated in various ways: M0 (or narrow money supply), including coins and notes in circulation plus the deposits of commercial banks with the Bank of England; M1, including all coins and notes plus personal money in current accounts; M2, including coins and notes and personal money in current and deposit accounts; M3, including coins and notes, personal money in current and deposit accounts, government deposits and deposits in currencies other than sterling (called £M3 in Britain); M4, including M3 plus money on deposit in banks and Treasury bills; M5, the broadest measure, which is formed of M4 plus building society accounts and accounts with national savings. In the US, money supply also includes L, which is calculated as M3, plus Treasury bills, bonds and commercial paper.

Dictionary of banking and finance. 2015.

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