Components of money supply

Money is whatever is generally accepted in payment, and its supply is measured in layers by liquidity. Narrow money (M1) is the most liquid: currency with the public plus demand deposits (current and savings deposits withdrawable on demand) plus other deposits with the central bank. Broad money (M3) adds time deposits, which are less liquid but still money-like. Worked example: if currency is 300, demand deposits 500, other deposits with the central bank 10, and time deposits 700, then M1 = 300 + 500 + 10 = 810 and M3 = 810 + 700 = 1510.