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Question
M3 and M4 are known as ______ money.
Options
Broad
Narrow
Both Broad and Narrow
None of these
MCQ
Fill in the Blanks
Solution
M3 and M4 are known as Broad money.
Explanation:
Broad money is defined as M3 and M4. M3 = M1 + all commercial and cooperative banks' time deposits (excluding interbank time deposits). M4 = M3 + Total Post Office Savings Organization Deposits (excluding National Saving Certificate). Because they contain less liquid assets, these money supply metrics are referred to as broad money.
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