Decoding some symbols of economic

Money Supply

I know that subject may will look containing some burden for some people, but I will try as much as my best to make it more simple and fun, without delving into the details of economic heavy to non-specialists, what drives some people to continue to read this topic, it is certainly a desire to decipher the mysteries of some economic terms, which hear it sometimes on the news, or from discussions professionals begin to feel upset them and of them, because they are alien to their ears and do not know its meaning or to what indicates.

 It will be our conversation in this area on short sections and useful, we will begin our short trip to speak of certain terms, such as money supply or offers cash , do not worry of ambiguous terms, they are descriptions or to transfer the labels to clarify the views of intellectuals, economists, and highlight some of the differences they see substantial and important from the point of view, there is no worry of the ambiguity of the term because you will discover that it refers to the simple things, to learn and deal with it traditionally in your daily life .

 All the talk about money and the previous definition, definitions can be considered just a theory and not a process, what are the practical definitions of money, then?

 A working definition of money in very simple, based on the extent of liquefaction and the ability to use the money, here's the bottom line, we have two or three types of money supply is (M1, M2, M3), what does this mean? Did you read or hear an economic analysis of days, dealing with the money supply, and I heard it or read it these three types? You certainly have passed these three symbols (M1, M2, M3), and certainly asked yourself many times what their meaning? If you are a non-specialist, I'm sure you did not find your head any meaning or significance to them, is not it? What does it mean that the symbols found on accuracy?

Money & Money supply

Maintains communities and nations, with volumes of certain coins, called the money supply, and this means the amount of money or the size of the money that is circulating in the economy, has agreed to split it into two main types, the money supply in the narrow sense "Narrow Money Supply" and the broad money supply "Broad Money".

 First: Narrow Money Supply

This is called the amount of money or the size of cash "Transaction Money" and economists call the money supply (M1), and enters under this kind of all banknotes and coins, which circulated by people, in their daily within the community, any "money in circulation" or (CR), and, of course, in addition to the volume of money in the banks, in the form of current accounts, or demand deposits "Demand Deposits" or (DD) and therefore we can say that (M1) = (DD) + (CR)

 Second: Broad Money

In addition to the previous species, falls within this definition, or the size of the money both from "Time Deposits" or (TD), as well as the accounts of "Savings" in banks or (S), and know the broad money supply (M2) Accordingly, We can use the following equation to express the broad money supply (M2)

M2 = M1 + (TD + S)

But is there a third type of money supply? What do you mean M3, then?

In fact, there is a third type has some economists (M3), the reason for the existence of three types or levels of the money supply, as usual, is due to the difference between the intellectuals, economists, or in determining the definition of the concept of money supply and the boundaries between each type.

So what are the (M3), then?

M3 and intended meaning or the broader money supply expanded to a JAMMEH the above in addition to the "Long-Term Deposits" and foreign currency deposits "Foreign currency deposits".

M3 = M1 + M2 + (LTD + FCD)

Many consider that the money supply only two types, but some felt that it should not be separation between the types of deposits, long-term or the longer ones because both are considered long-term, as well as foreign currency deposits, Combines to this type of deposits, long-term, and have no need to disconnect them, therefore argue that the money supply is only two narrow money supply and broad money supply.

*******

Pictures Source: Flicker