Money Supply Aggregates

Money supply aggregates are categories used to measure the total amount of money available in an economy at a given time. They range from the most liquid forms, like cash and checking accounts (known as M1), to broader measures that include savings accounts, certificates of deposit, and even longer-term investments (like M2 and M3). These aggregates help economists and policymakers understand liquidity, economic activity, and inflationary pressures, guiding decisions on interest rates and economic policies. Different aggregates capture various levels of accessibility and usage of money within the economy.