What determines the total money aggregate of M3? M3 (the broad concept of money supply): M1 plus time deposits with the banking system, made up of net bank credit to the government plus bank credit
What determines the total money aggregate of M3?
M3 (the broad concept of money supply): M1 plus time deposits with the banking system, made up of net bank credit to the government plus bank credit to the commercial sector, plus the net foreign exchange assets of the banking sector and the government’s currency liabilities to the public, less the net non-monetary …
Why M3 is called aggregate monetary resources?
The money supply is grouped into four classes of assets, called money aggregates. M3, also called broad money, includes M2, plus assets in large time deposits, eurodollars, and institution-only money market funds.
Why is M3 the most important monetary aggregate in South Africa?
Because M3 is the most comprehensive measure of the country’s aggregate money supply, it includes not only the “medium of exchange” (liquid) categories of money but also its “store of value” categories of monies.
What do you mean by monetary aggregates?
Monetary aggregates are compiled by Central Banks on the basis of surveys of monetary and financial institutions; they measure the amount of money circulating in an economy, and usually presented as end-of-month national currency stock series.
What are the 3 measures of money?
provides three measures of money – M1, M2, and M3, where M1 is the narrowest and M3 the broadest.
What is M3 money?
What Is M3? M3 is a measure of the money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements (repo), and larger liquid assets.
What are the different monetary aggregates?
What Are Monetary Aggregates? M0: Physical paper and coin currency in circulation, plus bank reserves held by the central bank also known as the monetary base. M1: All of M0, plus traveler’s checks and demand deposits. M2: All of M1, money market shares, and savings deposits.
What money is narrow money?
What is Narrow Money? Narrow money refers to a category of money supply that includes all the real money held by the central bank. It includes coins and currency, demand deposits, and other liquid assets. Narrow money in the US is known as M1 (M0 + demand accounts).
Is M3 broad money?
Broad money (M3) includes currency, deposits with an agreed maturity of up to two years, deposits redeemable at notice of up to three months and repurchase agreements, money market fund shares/units and debt securities up to two years. M3 is measured as a seasonally adjusted index based on 2015=100.
Why it is called narrow money?
Understanding Narrow Money The name is derived from the fact that M1/M0 are the narrowest or most restrictive forms of money that are the basis for the medium of exchange within an economy. This category of money is considered to be the most readily available for transactions and commerce.