Multiple choice

Which of the following is generally referred to as a “broader measure of money supply“?

  1. M1

  2. M2

  3. M3

  4. M4
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C Correct answer
Explanation

In monetary economics, M3 is considered the broader measure of money supply as it includes M1 (currency + demand deposits) plus M2 (savings deposits) and time deposits. M1 is the narrowest measure representing only the most liquid forms of money. M4 would be even broader if it exists in the system, but M3 is typically cited as the key broad aggregate.

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