Multiple Choice Questions on Consider the following statements I M1 is a broad concept of money II M2 is a narrow concept of........... for Common University Entrance Test (CUET) Preparation

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Multiple Choice Questions

Consider the following statements I M1 is a broad concept of money II M2 is a narrow concept of...........

Introductory Macro Economics Money and banking
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    Consider the following statements:

    I. M1 is a broad concept of money.

    II. M2 is a narrow concept of money.

    III. M2 includes both M1 and lime deposit of public with bank

    Which of the following is true with respect to the de concept of supply of money?

     

    I and II
     

    Incorrect Answer

    I only
     

    Incorrect Answer

    II and III

    Correct Answer

    II only

    Incorrect Answer
    Explanation:

    Option (3) is correct.
    Explanation: M1 and M2 are narrow money as they include highly liquid assets which are easily acceptable for payments M2 = M1 + Time Deposits of Public with Banks.

     

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