Money – Money Supply:
Reserve Money (M0):
|Money Supply Measures||Details|
|M1 (Narrow Money)||Currency with the public + demand deposits with banking system + Other deposits with the RBI|
|M2||M1 + Post Office Savings Deposits|
|M3 (Broad Money)||M1 + time deposits with the banking system|
|M4||M3 + total post office deposits|
Narrow Money (M1):
M2 is a broader money classification than M1, because it includes assets that are highly liquid but are not cash.
Broad Money (M3):
M3 is a measure of the money supply.
M3 = M2 plus large and long-term deposits
M4 = M3 + total post office deposits