How Much Money Is There in the United States?
What Is the Money Supply, and How Does It Affect the Economy? By Kimberly Amadeo Definition: The money supply is the cash, checks and savings held at banks, according to the Federal Reserve , is very narrowly defined. When most people speak of the money supply, they are referring to all forms of cash, credit and wealth that can be used to purchase goods and services, including investments . In recent years, credit has become the most important component of the money supply, far outweighing any cash on hand or savings in the bank. How Is the Official Money Supply Measured? The Federal Reserve has two main measurements of the U.S. money supply. The Fed reports on these measures every week. They are M1, which is the most liquid form of money and M2, which is a little more difficult to spend. Specifically: M1 includes currency, travelers checks, and checking account deposits. It also includes those checking accounts tha...