Which of these is also called narrow money ?
Which of these is also called narrow money ?
The correct option is A M1
Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time.
Money supply is measured in several ways which includes M1, M2, M3 and M4 measurement of money supply. Every measurement has it own definition with different components varying from most liquid to most rigid form.
M1 measurement of money supply is a narrow concept of money supply compared to any other measurement. M1 measurement of money supply includes only currency which inmost liquid form such as currency held by public in terms of coins and paper notes and demand deposits of the people with the commercial banks. Therefore, M1 is also called narrow money.
Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time.
Money supply is measured in several ways which includes M1, M2, M3 and M4 measurement of money supply. Every measurement has it own definition with different components varying from most liquid to most rigid form.
M1 measurement of money supply is a narrow concept of money supply compared to any other measurement. M1 measurement of money supply includes only currency which inmost liquid form such as currency held by public in terms of coins and paper notes and demand deposits of the people with the commercial banks. Therefore, M1 is also called narrow money.
