Money supply refers to the total value of money held by public at a particular point of time.
Components of Money Supply
(i) M1=It is the first and basic measure of money supply.
M1= Currency and coins with Public + Demand deposits of commercial banks + Other deposits.
(ii) M2=It is the broader concept.
M2=M1+ Saving deposits with Post Office Savings Banks
(iii) M3= Broader concept
M3=M1+ Net time deposits with banks.
(iv) M4=M3+ Total deposits with post office savings bank (Excluding NSC).