posted on 06-06-2019

Narrow Money

Updated October 1, 2019

What is Narrow Money?

Narrow money is a colloquial term for the total of a country's physical currency plus demand deposits and other liquid assets held by the central bank. The economic term for narrow money is M1.

How Does Narrow Money Work?

Narrow money is the most accessible money in an economy, which is why it is restricted to paper currency, coins and demand deposits (money in checking accounts, savings accounts and other highly liquid accounts).

Why Does Narrow Money Matter?

Narrow money is the most liquid form of money.


Read This Next

5 Credit Cards That Will Pay You Hundreds Just For Signing Up (2020)
What's even better than earning rewards for spending on your credit cards? Getting paid hundreds of ...
The Top 4 Balance Transfer Credit Cards for 2020
Tired of dragging credit card debt around with you? Taking 15 minutes to transfer your debt to a cre...
The 5 Best Rewards Credit Cards for 2020
If you're going to spend money anyway, then why not get paid for it? Whether you're looking for c...

Related Definitions

Term
In the finance world, a term is the length of time until a debt matures. A term can also be a condition of a deal, as evidenced by the phrase term sheet, which... See More
Currency
Currency is a medium of exchange for goods or services within an economy. See More
Liquid Asset
A liquid asset is cash or securities that can be converted to cash quickly. See More
Central Bank
A central bank is an institution responsible for determining the monetary policy of a nation or group of nations.  See More
Money
Money is a medium of exchange for goods or services within an economy. See More
Savings
In economics, savings is the amount that is left after spending. In banking, savings refers to savings accounts, which are short-term, interest-bearing... See More
Liquid
Liquid refers to the ability to transfer hard assets to cash or the state of being in a position where one has sufficient cash on hand to accommodate any and... See More

Popular Articles
Investing
Financial Statement Analysis for Beginners
Investing
15 Financial Ratios Every Investor Should Use
Investing
Calculating Internal Rate of Return Using Excel or a Financial Calculator
Personal Finance
5 Common Sense Lotto Realities Everyone Ignores
Loans
How to Calculate a Monthly Loan Payment in Excel (Mortgage, Car Loan, and More)
Loans Calculator
Loan Interest Calculator: How Much Interest Will I Pay My Lender?
Investing Calculator
Simple Savings Calculator: How Much Could I Save Up Over Time?
Investing Calculator
Million Dollar Savings Calculator: How Much Do I Need To Save to Become a Millionaire?
Loans Calculator
Car Loan Calculator: What Will My Monthly Principal & Interest Payment Be?
Mortgage Calculator
Mortgage Calculator: What Will My Monthly Principal & Interest Payment Be?
Copyright © 2020. InvestingAnswers, Inc. All Rights Reserved