M0, M 1, M2 and M3 are all important indicators reflecting the money supply. The international classification is: narrow money (M 1)= cash in circulation+cheque deposit (and transfer credit card deposit); Broad money (M2)=M 1+ savings deposits (including current and fixed savings deposits); There are M3=M2+ other short-term current assets (such as treasury bills, bank acceptance bills, commercial paper, etc.). ). In China, the currency classification is as follows: M0= cash in circulation; Narrow money (M 1)=M0+ corporate demand deposits+government organizations and military deposits+rural deposits+credit card deposits held by individuals; Broad money (M2)=M 1+ savings deposits of urban and rural residents+corporate time deposits+trust deposits+other deposits. There are M3=M2+ financial bonds+commercial paper+large negotiable certificates of deposit, etc. Where M2 minus M 1 is the quasi-currency, and M3 is set according to the continuous innovation of financial instruments. M 1 reflects the actual purchasing power in the economy; M2 not only reflects the actual purchasing power, but also reflects the potential purchasing power. If the growth rate of M 1 is fast, the consumption and terminal market will be active; If M2 grows faster, the investment and intermediary market will be active. Central banks and commercial banks can judge monetary policy accordingly. M2 is too high and M 1 is too low, indicating that investment is overheated, demand is not strong, and there is a crisis risk; M 1 is too high, and M2 is too low, indicating that there is a strong demand and insufficient investment, and there is a risk of price increase.

Foreign exchange accounts for, say, 20 trillion. Does this count as m 1 or m2? It should be regarded as M2 or M3, which is a potential purchasing power, but so far, the more foreign exchange funds, the better, and it must not be spent, otherwise the country will be in danger.