DEFINITION of 'Broad Liquidity'

A category of the money supply which includes: all funds in M3, individual holdings in accounts, savings bonds, T-bills with maturity of less than one year, commercial papers, and banker's acceptances.

BREAKING DOWN 'Broad Liquidity'

This is the widest measure of money supply. Broad liquidity can be generalized as the total amount of money issued by a central bank plus any new money created by commercial banks through lending. This is one of the economic measures that policy-makers and investors use to track and forecast inflation.

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