Which of these is also called broad money?M3.M1.M2.M4. (2024)

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A

M2.

B

M1.

C

M3.

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Solution

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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 givenpoint of time.

Money supply is measured in several ways which includes M1, M2, M3and M4 measurement of money supply. Every measurement has it owndefinition with different components varying from most liquid to most rigid form.

M3 measurement of money supply is a broader concept of money supply compared to M1. Besides all the components of M1, it includes net time deposits (or fixed deposits or term deposits) of the people with the commercial banks. Therefore, M3 is also called broad money.

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Q

1

Q. RBI publishes figures for four alternative measures of money supply, viz. M1,M2,M3 and M4. Arrange them in decreasing order of their liquidity:

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Q

2

As money can be easily withdrawn in M1 and M2, it is known as

, whereas the money represented by M3 and M4 is called

.

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3

Money supply is classified into M1, M2, M3 and M4 based on:


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4

Which of these is also called broad money?

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5

Consider the following statements related to money supply:-

Which of the above statements are incorrect?


  1. 2 and 3 only

  2. 2, 3 and 4 only

  3. 1, 2 and 4 only

  4. 1, 2 and 3 only

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Which of these is also called broad money?M3.M1.M2.M4. (2024)

FAQs

Which of these is also called broad money?M3.M1.M2.M4.? ›

The money represented by M3 and M4 includes time deposits. It means they cannot be withdrawn or used by the people immediately like M1 and M2, which represent narrow money. Therefore, M3 and M4 are termed as broad money.

What is another name for broad money? ›

M3 measurement of money supply is a broader concept of money supply compared to M1. Besides all the components of M1, it includes net time deposits (or fixed deposits or term deposits) of the people with the commercial banks. Therefore, M3 is also called broad money.

Is M2 broad money? ›

Typically, "broad money" refers to M2, M3, and/or M4. The term "narrow money" typically covers the most liquid forms of money, i.e. currency (banknotes and coins) as well as bank-account balances that can immediately be converted into currency or used for cashless payments (overnight deposits, checking accounts, etc).

What type of money is M1 M2 M3 M4? ›

Narrow money is also known as M1 and M2. Broad money means M3 and M4. The liquidity of these grades is decreasing. M1 is the most liquid and makes transactions the easiest, while M4 is the least liquid.

What is M1 M2 M3 called? ›

M1, M2, and M3 are classifications of money in the United States. M1 consists of all money in circulation as well as deposits in banks. M2 money includes M1 money plus savings deposits and money market funds. M3, which has been discontinued, includes M2 plus time deposits.

Is broad money M3 or M4? ›

The money represented by M3 and M4 includes time deposits. It means they cannot be withdrawn or used by the people immediately like M1 and M2, which represent narrow money. Therefore, M3 and M4 are termed as broad money.

Is M3 called broad money? ›

Definition of. Broad money (M3) Broad money (M3) includes currency, deposits with an agreed maturity of up to two years, deposits redeemable at notice of up to three months and repurchase agreements, money market fund shares/units and debt securities up to two years.

Is M1 and M2 broad money? ›

M1 and M2 money have several definitions, ranging from narrow to broad. M1 = coins and currency in circulation + checkable (demand) deposit + traveler's checks. M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits.

What is M3 money called? ›

M3 is broad money. M3 = M1 + Time deposits with the banking system. M2 = M1 + Savings deposits of post office savings banks. M1 = Currency with public + Demand deposits with the Banking system (savings account, current account).

What is M3 also known as? ›

The M3 money is also known as broad money. The M3 money includes assets that are less liquid than other components of money supply.

Is broad money M2 or M3? ›

In most cases, broad money means the same as M3, while M0 and M1 usually refer to narrow money.

What is M2 M3 and M4? ›

It is M2 – time deposits + money market funds. M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. M4-: M3 + Commercial Paper. M4: M4- + T-Bills (or M3 + Commercial Paper + T-Bills)

What money is M1 and M2 also known as? ›

The Relationship between M1 and M2 Money. M1 and M2 money are the two mostly commonly used definitions of money. M1 = coins and currency in circulation + checkable (demand) deposit + traveler's checks + saving deposits. M2 = M1 + money market funds + certificates of deposit + other time deposits.

What is M1 M2 M2? ›

M1 is the most frequently reported headline number. It is M0 plus money held in regular savings accounts and in travelers' checks. M2 is all of M1 plus money invested in short-term assets that mature in less than a year, like some certificates of deposit.

What is M1, M2, M3, M4 in engineering? ›

In Engineering, a student needs a good command in mathematics. This mathematical knowledge can be classified into three different subjects. Famously referred to as M-1, M-2, and M-3 where M is mathematics. M1, M2, M3 in engineering stands for Mathematics-1, Mathematics-2, Mathematics-3, respectively.

What is M4 money? ›

M4 was first introduced as an official monetary aggregate in 1987. Along with notes and coin, it includes the sterling deposit liabilities of all UK banks and building societies to other private sector UK residents.

What does broad money stand for? ›

1. to be a symbol for or sign of; represent; mean. 2. US, Informal. to put up with; endure; tolerate.

What is the best example of broad money? ›

Broad money generally also accounts for "near money," such as deposit certificates (DCs), foreign currencies, money market accounts, marketable securities, Treasury bills (T-Bills), and anything else that can easily be converted into cash, excluding company shares.

What is another slang term for a lot of money? ›

big ones. The phrase big ones is used both in the US and UK to refer to dollar bills/pounds or to large amounts of money such as a thousand dollars/pounds or a million dollars/pounds. Big ones has been used in this sense since at least 1863.

What is full bodied money also known as? ›

Any money whose face value (exchange value) is equal to its intrinsic value (the worth of the metallic content of money) is called full-bodied money or standard money.

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