Narrow Money

AAA

DEFINITION of 'Narrow Money'

A category of money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the central bank. In the United States narrow money is classified as M1 (M0 + demand accounts), while in the U.K. M0 is referenced as narrow money.

INVESTOPEDIA EXPLAINS 'Narrow Money'

The name comes from the fact that M1/M0 are the narrowest or most restrictive ideas of money that are the basis for the medium of exchange within the economy. This category of money is considered to be the most readily available for transactions and commerce.

RELATED TERMS
  1. M3

    A measure of money supply that includes M2 as well as large time ...
  2. M2

    A measure of money supply that includes cash and checking deposits ...
  3. M1

    A measure of the money supply that includes all physical money, ...
  4. Broad Money

    In economics, broad money refers to the most inclusive definition ...
  5. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  6. Money Supply

    The entire stock of currency and other liquid instruments in ...
Related Articles
  1. How The U.S. Government Formulates Monetary ...
    Personal Finance

    How The U.S. Government Formulates Monetary ...

  2. What Are Central Banks?
    Personal Finance

    What Are Central Banks?

  3. What Is Money?
    Economics

    What Is Money?

  4. The Federal Reserve
    Economics

    The Federal Reserve

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center