What is the definition of Money Zero Maturity (MZM)?

Money Zero Maturity (MZM) is defined as a measure of the money supply that includes liquid assets which can be quickly converted to cash, specifically focusing on the availability of money without any maturity constraints. The correct definition states that MZM equals M2 minus small time deposits plus corporate money market fund balances.

M2 is a broader measure of the money supply that includes cash, checking deposits, and easily convertible near money such as savings deposits, time deposits, and retail money market funds. However, small time deposits are less liquid because they have fixed terms, making them less accessible for immediate use. By subtracting these from M2 and adding corporate money market fund balances—which are also short-term and highly liquid assets—MZM captures the total amount of money that is available for immediate spending.

This distinction emphasizes the liquidity aspect of money supply definitions, which is crucial for understanding how quickly and easily money can be utilized in the economy.