MONEY SUPPLY Definition

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MONEY SUPPLY is the three categories of money supply (MI, M2, M3) as defined by the U.S. Federal Reserve Board.

M1 The sum of-currency held by the public, plus travelers' checks, plus demand deposits, plus other checkable deposits-i.e., negotiable order of with­drawal (NOW) accounts, automatic transfer service (ATS) accounts and credit union share drafts.

M2 MI plus savings accounts and small-denomina­tion time deposits, plus shares in money market mutual funds (other than those restricted to institu­tional investors) and overnight Eurodollars and repurchase agreements.

M3 M2 plus large-denomination time deposits (over $100,000) at all depository institutions, large­-denomination term repurchase agreements and shares in money market mutual funds restricted to institutional investors.

Learn new Accounting Terms

HIGH CREDIT is the most a debtor has ever charged with any one creditor.

CAPITAL RECEIPTS is proceeds from the sale of capital assets. They may be used to finance new capital expenditure or repay existing loan debt. Receipts available to finance capital expenditure in future years are normally held in the usable capital receipts reserve.

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