Money supply refers to the total value of money held by public at a particular point of time.
Components of Money Supply
(i) ${\mathrm{M}}_1=\mathrm{It}$ is the first and basic measure of money supply.
${\mathrm{M}}_1=$ Currency and coins with Public + Demand deposits of commercial banks + Other deposits.
(ii) ${\mathrm{M}}_2=\mathrm{It}$ is the broader concept.
${\mathrm{M}}_2={\mathrm{M}}_1+$ Saving deposits with Post Office Savings Banks
(iii) ${\mathrm{M}}_3=$ Broader concept
${\mathrm{M}}_3={\mathrm{M}}_1+$ Net time deposits with banks.
(iv) ${\mathrm{M}}_4={\mathrm{M}}_3+$ Total deposits with post office savings bank (Excluding NSC).