WBCS.LIVE practice question

Which is the most liquid measure of money supply?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. M1
  2. M2
  3. M3
  4. M4

Correct answer and explanation

Correct answer: M1

Explanation: āœ… Correct Answer: A) M1 šŸ“š Explanation: In economics, 'M1' is considered the 'most liquid' measure of the money supply because it includes physical currency (cash) and demand deposits in banks. These forms of money can be used immediately for transactions. Other measures like M2, M3, and M4 include less liquid assets like time deposits and savings bonds.