What term refers to M3 plus non-bank deposits minus bank holdings?

The term that refers to M3 plus non-bank deposits minus bank holdings is known as Broad Money. Broad Money encompasses the total amount of money in an economy, which includes various forms of money that people and businesses can use for transactions. By including M3, which covers liquid assets held by the public—including cash and checking accounts—along with non-bank deposits and adjusting for bank holdings, Broad Money provides a comprehensive view of the money supply that includes both cash and deposits that can readily be converted into cash for spending purposes.

This classification is important because it helps economists and policymakers understand the overall liquidity in the economy, which can influence monetary policy decisions and economic stability. Broad Money is used as an indicator for economic health, as it reflects all forms of money available for expenditure and investment in the economy.