Which is 7 the most liquid form of money supply M1?
Answer and Explanation:
M1 and M2 are progressively more inclusive measures of money: M1 is included in M2. M1 consists of the most liquid forms of money, namely currency, demand deposits, and other liquid deposits. Other liquid deposits includes ATS and NOW accounts, share draft accounts, and savings deposits.
M1 is the money supply that is composed of currency, demand deposits, other liquid deposits—which includes savings deposits. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash.
M1 is most liquid.
Cash is the most liquid asset, followed by cash equivalents, which are things like money market accounts, certificates of deposit (CDs), or time deposits.
M1 and M2 are known as narrow money while M3 and M4 are known as broad money. These measures are in decreasing order of liquidity. M1 is most liquid and easiest for transactions whereas M4 is least liquid of all.
M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler's checks. M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds.
The smallest and most liquid measure, M0, is strictly currency in circulation plus commercial bank reserve balances at Federal Reserve Banks; M0 is often referred to as the "monetary base." M1 is defined as the sum of currency in circulation, demand deposits at commercial banks, and other liquid deposits; it is often ...
Cash on hand is the most liquid type of asset, followed by funds you can withdraw from your bank accounts.
M1 is the most liquid measure of the money supply. It consists of checking deposits, travelers checks, and currency in circulation. These three items are immediately spendable (liquid) .
Which is the most liquid M0 M1 M2 M3?
| Mo(Reserve Money) | Currency in circulation + Bankers' deposits with the RBI + 'Other' deposits with the RBI |
|---|---|
| M1 (Narrow Money) | Currency with the public + Deposit money of the public |
| M2 | M1 + Savings deposits with Post office savings banks |
| M3 (Broad Money) | M1+ Time deposits with the banking system |
By 'most liquid' one means, instruments which can be easily converted into cash. Therefore, M1 is the most liquid measure of the money supply. After M1, it is M2 which is the second most liquid and then M3.
M4is the least liquid and M1 is the most liquid measure of money.
Cash on hand is considered to be a liquid asset because it can be readily accessed. Cash is a legal tender that a company can use to settle its current liabilities. The money in your checking account, savings account, or money market account is considered liquid because it can be withdrawn easily to settle liabilities.
The most liquid assets are those that are the quickest to convert to cash. Currency is very liquid since it is already cash. Savings bonds are also highly liquid because they can be redeemed at the bank. The least liquid of the three assets would be a house.
- Cash in a savings account (the most liquid)
- Publicly-traded stocks.
- Corporate bonds.
- Mutual funds.
- Exchange-traded funds.
- Assets like real estate, private equity, and collectibles (the least liquid)
M1 is the most liquid and easiest for transactions whereas M4 is the least liquid of all. M3 is the most commonly used measure of the money supply. It is also known as aggregate monetary resources1.
The broadest measure of the money supply is M3. M3 includes what we already had in M2 plus a few items that are less liquid than M2, but that are still liquid enough that we can think of them as being part of the money supply. For instance, M3 also consists of large time deposits.
M1 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI. M2 = M1 + Savings deposits of post office savings banks. Broad Money (M3) M3 = M1 + Time deposits with the banking system. M4 = M3 + All deposits with post office savings banks.
M2 is a more comprehensive calculation than M1 because it includes assets that are highly liquid but are not intended to be routinely used as cash. Consumers and businesses don't usually use time deposits when making purchases or paying bills, but in a pinch, they could convert them to cash in short order.
Why is M2 less liquid?
Historically, M1 money supply included those monies that are very liquid such as cash, checkable (demand) deposits, and traveler's checks, while M2 money supply included those monies that are less liquid in nature; M2 included M1 plus savings and time deposits, certificates of deposits, and money market funds.
They'd both have 64GB of RAM and 4TB SSD2, but M1 Max would have a 10‑Core CPU and 32‑Core GPU, while M2 Max would have a 12‑Core CPU and 38‑Core GPU.
US M2 Money Stock refers to the measure of money supply that includes financial assets held mainly by households such as savings deposits, time deposits, and balances in retail money market mutual funds, in addition to more readily-available liquid financial assets as defined by the M1 measure of money, such as ...
Answer and Explanation: Checking accounts is the most liquid as you can withdraw money whenever an account holder wants. There is no limitation on money taken out of the account.
M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These gradations are in decreasing order of liquidity. M1 is most liquid and easiest for transactions whereas M4 is least liquid of all.
