Which of the following is not true about M1 (The most liquid component of the mo
ID: 1097248 • Letter: W
Question
Which of the following is not true about M1 (The most liquid component of
the money supply)?
It includes the most liquid forms of money
It is the narrowest definition of the money supply
Savings accounts makes up approximately one-third of it
Currency in circulation makes up approximately half of it.
It includes the most liquid forms of money
It is the narrowest definition of the money supply
Savings accounts makes up approximately one-third of it
Currency in circulation makes up approximately half of it.
Explanation / Answer
M1 narrow measure of money supply and it includes the demand deposit and currency in circulation. Saving does not form the part of M1 Measure of money supply.
Hence, Savings accounts makes up approximately one-third of it is not true
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