What is the term for an aggregate that measures the quantity of money held by households, firms and governments, including M1, M2 or M3?

• A. Monetary policy
• B. Monetary aggregates
• C. Nominal GDP
• D. Interest rate

Answer: (B)

Monetary aggregates describe the total quantity of money in an economy, spanning what households, firms, and governments hold. They group money into measures like M1, M2, and M3, which differ by liquidity—M1 being the most liquid (currency plus checking deposits), with M2 and M3 adding near-money assets and larger time deposits. This term is about how much money is available in the economy, not about policy actions, prices, or rates. The other options refer to actions (monetary policy), a measure of economic output (nominal GDP), or a price (the interest rate), not the money supply itself. So the best term for this concept is monetary aggregates.