M1, M2, M3 (money supply categories)

M1, M2, and M3 are categories used to measure the money supply in an economy. M1 includes the most liquid forms—cash, coins, checking accounts, and traveler's checks—easily accessible for spending. M2 adds near-money assets like savings accounts, small time deposits, and retail money market funds, which are slightly less liquid. M3 (used in some countries) encompasses M2 plus larger, institutional investments like large time deposits and institutional money market funds, representing a broader view of the money available in the economy. These categories help analysts understand liquidity and economic activity.