What is the money supply?
It’s the stock of money and the supply of new money. The currency– coins and notes that people spend makes up only a very small part of the money supply. The rest consists of bank deposits.
Are there different ways of measuring it?
Yes. It depends on whether you include time deposits - bank deposits that can only be withdrawn after a certain period of time. The smallest measure is called narrow money. This only includes currency and sight deposits - bank deposits that customers can withdraw whenever they like. The other measures are of broad money. This includes savings deposits and time deposits, as well as money market funds, certificates of deposit, repurchase agreements and things like that.
What about spending?
To measure money you also have to know how often it is spent in a given period. This is money's velocity of circulation- how quickly it moves from one institution or bank account to another. In other words, the quantity of money spent is the money supply times its velocity of circulation.