


St. Charles Community College
ECON 110 Principles of Macroeconomics
Official Measures of Money
| Measure | Component | Description |
| M1 |
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Note: These accounts are used primarily as a medium of exchange...i.e. for transactions. |
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| M2 |
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Note: A broader measure. The money in the non-M1component is used primarily as a store of value. These funds can be transferred to a transaction account. |
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| M3 |
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Note: This is the largest measure of money. It is generally used by large business and financial institutions. |
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| L | M3 | See previous description. |
| Non-bank public holdings of U. S. savings banks. | ||
| Short term treasury securities. | Treasury bills (less than one year maturity – issued in denominations of$10,000 to $1,000,000. | |
| Commercial paper. | Short term debt instruments offeredby large corporations. | |
| Bankers Acceptances. (Less money market fund holdings of these assets.) | ||
Note: L has not served as a target for monetary policy, in part because data are not available a month later than data on the M’s, and also because its components are less influenced by Federal Reserve policy. |