Money Supply Calculator
Calculate various US money supply measures (M0, M1, M2, M3, M4, MZM) and analyze monetary policy impacts
M0 Money Supply
The total of all physical currency, including coinage.
Monetary Base (MB)
The total of all physical currency plus Federal Reserve deposits.
M1 Money Supply
M1 = M0 + Demand deposits + Travelers checks + Checkable deposits + Savings accounts
M2 Money Supply
M2 = M1 + Money market accounts + Time deposits <$100,000
M3 & M4 Money Supply
Money Supply Change with Reserve Ratio
Calculate the potential change in money supply based on reserve ratio and reserve changes.
Money Supply Summary
Money Supply Hierarchy
Key Facts
Federal Reserve
Controls US money supply through monetary policy
Liquidity Ranking
M0 > M1 > M2 > M3 > M4 (most to least liquid)
Economic Impact
Money supply affects inflation and interest rates
Understanding Money Supply
What is Money Supply?
Money supply refers to the total stock of money present in an economy at a particular time. The Federal Reserve measures different types of money supply to understand economic conditions and implement appropriate monetary policy.
Money Supply Measures
- •M0: Physical currency (notes and coins)
- •M1: M0 + demand deposits + checkable deposits
- •M2: M1 + savings + money market accounts
- •M3: M2 + large time deposits
Money Supply Formulas
M0 = Notes + Coins
MB = M0 + Fed Deposits
M1 = M0 + Demand Deposits + ...
M2 = M1 + Money Market + ...
Money Multiplier = 1 / Reserve Ratio
Monetary Policy Impact
- Expansionary: Increase money supply to stimulate economy
- Contractionary: Decrease money supply to control inflation
- Tools: Reserve ratios, open market operations, interest rates
Important: Changes in money supply directly affect inflation, interest rates, and overall economic activity.
How Banking Affects Money Supply
Money Creation
Banks create money through lending, not just from existing deposits
Reserve Requirements
Banks must hold a portion of deposits as reserves with the Fed
Money Multiplier Effect
Small changes in reserves can lead to larger changes in money supply