Economics · Money Supply
Which of the following statements correctly differentiates between 'Narrow Money' (M1) and 'Broad Money' (M3)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Narrow Money includes only time deposits; Broad Money includes currency and demand deposits.
- 2Narrow Money includes all bank deposits; Broad Money excludes demand deposits.
- 3Narrow Money includes only currency notes; Broad Money includes currency and all deposits.
- 4Narrow Money includes demand deposits and currency; Broad Money includes Narrow Money plus time deposits and other liquid assets.✓
Correct answer
Narrow Money includes demand deposits and currency; Broad Money includes Narrow Money plus time deposits and other liquid assets.
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