- M₁ is the most liquid measure of money supply. - M₁ includes currency and demand deposits. - M₂ (M₁ + savings deposits with post office savings banks) is also considered a narrow measure, but M₁ is the fundamental 'narrow money' concept among the options. - M₃ and M₄ are considered 'broad money' as they include less liquid assets like time deposits.
Following concept of money supply is called 'narrow money':
Asked in WBCS Main Paper 5 2021 · Topic: Money & Banking (Money: Functions, Forms, and Measures of Money Supply)
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