What is MONEY SUPPLY?

What is included in GDP that isn't included in the M3 money supply?

• I noticed that the M3 money supply was a fraction of GDP according to a graph on wikipedia (under "money supply"), and I always thought that the M3 money supply was the comprehensive measure of the total money supply, so I was a little confused to see this fact. Pls educate me if you can.

• Answer:

  That's a nonsensical question because they are too different types of measurements. One is a stock and one is a flow. GDP is not a measure of the money supply (ie, not a snapshot of the total STOCK of money), it is a FLOW -- a measurement of the value of business transactions that occur during a given time period. You'd expect annual GDP to be much greater than the money supply, because a dollar is spent and respent and respent during the year -- one person's spending is another person's income, which can then be spent in turn.