Which measure of the money supply includes M2 along with larger time deposits and institutional money market accounts?

The measure of the money supply that includes M2 along with larger time deposits and institutional money market accounts is M3. M3 encompasses all components of M2, which includes cash, checking deposits, and easily convertible near money like savings deposits, time deposits under a specific amount, and retail money market accounts. Additionally, M3 expands this definition further by incorporating large-denomination time deposits, which typically require a minimum investment, as well as institutional money market funds, which are designed for large organizations and investors. This broader measure captures a wider view of the money supply, reflecting not just the smaller, more liquid forms of money but also those that are less liquid and primarily utilized by institutions.

In contrast, M1 only represents the most liquid forms of money, while M2 includes all of M1 plus certain near-money assets. Recognizing M3 is crucial for grasping the full breadth of the money supply, particularly as it can influence monetary policy and economic analysis regarding liquidity in the economy.