What is the Generalized currency
broad money supply (Broad money) is an economic concept, and the narrow money corresponds to a form or caliber of the money supply world pie network information , M2, and its method of calculation is a transaction money (M1, namely social total currency in circulation plus demand deposits), as well as time deposits and savings deposits.
However, due to historical reasons, different countries, statistical coverage and representation will be different. For example, in U.S. economic statistics are often expressed in M3 broad money; in the UK, while the M4.
So-called broad money, both to include advanced mobility, demand deposits, including mobility somewhat less, but the proceeds of the deposit currency
international roughly division:
currency (M0) = banknotes outside the banking system or the Mint
narrow money (M1) = cash in circulation + checking deposits (as well as transfer credit card deposits)
the broad money (M2) = M1 + savings deposits (including demand and time savings deposits) < the BR> In addition, M3 = M2 + other short-term liquid assets (such as treasury bills, bankers acceptances, commercial paper World Steel Pipe News , etc.)
[edit this paragraph] the division of China's currency level is
M0 = cash in circulation
the personal holdings of broad money (M2) = M1 + savings deposits of urban and rural residents + enterprise deposit the periodic nature of the deposits + Trust Deposits + other deposits
in addition to the M3 = M2 + financial bond + commercial paper + large negotiable certificates of deposit, etc.;
which, M2 minus M1 is a quasi-currency, the M3 is based on a financial instrument innovation and set up.
The M1 reflect the real purchasing power of the economy; M2 not only reflects the reality of purchasing power, but also reflect the potential purchasing power. M1 growth rate is faster, consumption and end-market activity; if the faster M2 growth, investment and active middle market. The central bank and commercial banks could then determine monetary policy. Too high and too low M1 M2 showed that the overheated investment demand, there is risk of a crisis; too high, the M1 and M2 is too low, indicating strong demand, insufficient investment, prices of risk.