Answer to Question #126353 in Macroeconomics for Humphrey Msigwa

Question

What are type of money supply

Answer 1

The types of money supply are categorized as M0, M1.M2 and M3.

M0 refers to general notes and coins in circulation.

M1 refers to general notes and coins that are in circulation in addition to money equivalents that can be quickly and easily converted to money.

Both M0 and M1 are sometimes referred to as narrow money.

M2 refers to all the types included in both M0 and M1 and further includes short term deposits in banks and other money market funds.It is the intermediate measure of money supply.

M3 refers to includes all the properties of M2, M1 and M0 and further includes long terms deposits, balances in institutional money market funds and term purchase agreements.