InvestorQ : According which approach, time deposit with commercial bank is included in the measurement of money supply.
Hardik Sharma made post

According which approach, time deposit with commercial bank is included in the measurement of money supply.

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Dawn Cherian answered.
1 week ago
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The money supply is the measurement of all currency and other liquid instruments in a country’s economy at a particular date. It includes both cash and deposits that could be used as easily as cash, or are readily available as cash.

So, the government of a country issues paper currency and coins through some combination of apex banks and treasuries. Money supply has its impact on the economy such as an increase in the money supply lowers the interest rate and vice-versa.
Money supply reflects different types of liquidity that various types of money have in the economy.

The different types of money supplies are categorized as Ms, such as:

M0, M1, M2, and M3, based on the type and size of the instrument. So M1, for example, includes coins and notes which are in circulation in the economy and other equivalents that could be easily converted into cash. M2 includes M1, money market instruments, and short-term time deposits with banks. M3 includes M2 and long-term deposits.

M0 includes financial assets with zero maturity and that are redeemable at par. However, not all classifications are widely used, so they can vary from country to country. Every country measures the money supply under various categories, and it is published annually.
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