M0

What is 'M0'

M0 is a measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. In the United Kingdom, the M0 supply is also referred to as narrow money.

BREAKING DOWN 'M0'

M0 (M-zero) is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency. This measure is known as narrow money because it is the smallest measure of the money supply.

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RELATED FAQS
  1. Does M1 include foreign currency?

    Learn the definition of M1, as well as other categories of money supply in the United States. Learn how it may differ in ... Read Answer >>
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    Learn about how the law of supply and demand affects monetary policy in the United States. Changing interest rates leads ... Read Answer >>
  3. How do central banks inject money into the economy?

    Central banks use several different methods to increase (or decrease) the amount of money in the banking system. These actions ... Read Answer >>
  4. How is money supply used in monetary policy?

    Learn about the three components of the Federal Reserve's monetary policy. Understand how these three components use the ... Read Answer >>
  5. How does money supply affect interest rates?

    Read about the link between the supply of money and market interest rates, and find out why money supply alone can't explain ... Read Answer >>
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    Read about some of the precise measures implemented in most monetary policies, and learn why monetary policy is considered ... Read Answer >>
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