Which of the following is described as M3?

The designation M3 refers to a broad measure of the money supply that includes various components of liquid financial assets in an economy. Specifically, it encompasses M2 (which includes all the money in M1, such as currency in circulation and demand deposits, as well as savings accounts and small time deposits) along with larger liquid assets, such as institutional money market funds and large denomination time deposits.

When considering the characteristics of M3, the inclusion of deposits at non-bank entities is significant because it expands the measure of money supply beyond typical banking institutions, capturing a more comprehensive view of financial liquidity in the economy. This broader scope helps economists and policymakers analyze money supply trends and their potential impacts on inflation and economic growth.

The other options presented do not accurately reflect the nature of M3. For example, restricting M3 only to large denomination time deposits or inaccurately categorizing it with M0 and savings accounts does not encompass its full definition or its components. Therefore, the answer that correctly describes M3 as encompassing M2 plus deposits at non-bank entities is the most accurate understanding of this monetary measure.