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    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.
    A 1C, 2B, 3A Correct Answer Incorrect Answer
    B 1B, 2A, 3C Correct Answer Incorrect Answer
    C 1C, 2A, 3B Correct Answer Incorrect Answer
    D 1A, 2C, 3B Correct Answer Incorrect Answer
    E 1C, 2B, 3C Correct Answer Incorrect Answer

    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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