money supply



  • noun the amount of money in a country’s economy, consisting mainly of the money in circulation and that held in savings and cheque accounts


  • noun the amount of money which exists in a country. 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, reduces the possibility of lending and imposes similar restrictions) the amount of money available in the economy is reduced and thus may reduce spending. Money supply is calculated in various ways.


  • The quantity of funds in an economic system at a particular time. Measures of the money supply include: M1 = the currency circulating, as well as demand deposits and balances of checking accounts; M2 = M1 in addition to net time deposits, except large CDs; and M3 = M2 in addition to deposits held at non-bank institutions.