“Broad money” is an economic concept.
A form or measure of M2, which is calculated as transactions (M1), the total amount of money in circulation plus demand deposits, time deposits and savings deposits.
The sum of narrow money (M1) plus time deposits in commercial banks.
Since various time deposits can generally be withdrawn in advance and converted into real purchasing power, they can be counted as money, so as to reflect the circulation of money more comprehensively and facilitate the analysis and control of market financial activities.
Broadly speaking, broad money includes both liquid cash and demand deposits and less liquid, but yielding, deposit money.
The international division is roughly divided into cash in circulation M0;
Narrow money M1 = M0+ demand deposits in commercial banks;
= M1+ time deposits in commercial banks;
Broad money M3 = M2+ deposits in other financial institutions.
