Question
Match the following measures of money supply with their
correct descriptions: 1. M1 2. M2 3. M3 A. M1 + Savings deposits with post office savings banks. B. M1 + Savings deposits with banks. C. Currency with the public + Demand deposits with banks.Solution
M1 includes currency with the public and demand deposits (C), M2 includes M1 and savings deposits with banks (B), and M3 includes M1 and savings deposits with post office savings banks (A).
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