els of inflation and thus was not performing well in international markets. Mrs Thatcher saw the problem as being based in the governments tendency up to that point of spending money it did not have. Essentially the new governments policy was simple ; lower the money supply and cure inflation thus restoring competitiveness. Thatcher used several monetarist ideals to accomplish this objective , including the policy of 'overfunding'.
             To control the rate of inflation the government had to control the money supply. This is most certainly not an easy task. The money supply is defined in six different ways ; M0 to M5 . These are the range of monetary aggregates and range from narrow to broad. Essentially M0 is the monetary base which consists of "notes and coins circulation with the public, plus cash held by banks and banks' balances with [the Bank of England]." M1 consists of M0 plus "accounts and sight deposits with banks denominated in sterling." In M2 there is everything in M1 "plus sterling deposit acco
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