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Which measure of money supply is the one most commonly used?
AM2
BM4
CM3
DM1
Answer & Solution
Correct answer: C. M3
1. M3 equals M1 plus the net time deposits of commercial banks.
2. It is broad money, and it is the **most commonly used** measure.
3. It is also referred to as aggregate monetary resources.
4. M1 is the most liquid measure but not the headline one, which is the distinction being tested.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 3 "Money and Banking", section 3.2 DEMAND FOR MONEY AND SUPPLY OF MONEY_
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