Money Supply

Money Supply
The supply of money is the whole amount of finance in terms of economy at a certain time. It is regarded as a significant instrument used for controlling inflation. Generally, there are three different measures for the supply of money known as M2, M1, M3 and many more. M1 is described as the narrow measure of the function of money as a techniqueof exchange and contains coins and notes in circulation. M2 is the broader measure reflecting the function of the money as the value store. It includes M1 added with time deposits and savings. Finally, M3 covers the items that are regarded close substitutes for finance. This calculated as M2 added with large deposits.