This page has been robot translated, sorry for typos if any. Original content here.

Money and credit - Ivanov V.M.

5.2. Money supply

The most important quantitative indicator of money circulation is the money supply, which is the total amount of purchasing and means of payment that service economic turnover and belong to private individuals, enterprises of all forms of ownership and the state. For the analysis of quantitative changes in money circulation on a certain date and for a certain period, as well as for the development of measures to regulate the growth rate of the money supply, various indicators are used - monetary aggregates:

M1 unit - includes cash in circulation and funds in current accounts;

M2 unit - this is M1 plus term and savings deposits in commercial banks (up to four years);

M3 unit contains M2 unit plus savings deposits in specialized credit institutions;

M4 unit includes M3 plus certificates of deposit of large commercial banks.

In the United States, four monetary aggregates are used to determine the money supply, three in Japan and Germany, and two in England and France.

The money supply distinguishes between active money used in cash and non-cash circulation and passive (accumulations, reserves, account balances), which can only be potentially used in transactions.