Question

RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4. Among these, which are known as Narrow money?

A M1 and M3 Correct Answer Incorrect Answer
B M2 and M3 Correct Answer Incorrect Answer
C M3 and M4 Correct Answer Incorrect Answer
D M1 and M2 Correct Answer Incorrect Answer

Solution

M1 & M2 can be easily M1 & M2 can be easily converted to cash, hence called as Narrow Money. They are the most liquid form.

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