M1 includes net demand deposits and not gross demand deposits
True or False with Reasons:
M1 includes net demand deposits and not gross demand deposits.
Anurag Pathak Changed status to publish December 15, 2023
True,
As net demand deposits do not include inter-banking claims.
Demand deposits with commercial banks consist of:
1. demand deposits by the public
2. Inter-bank deposits
M1 is the most liquid form of money supply. It only includes demand deposits by the public with commercial banks.
As it is readily available for payment.
Anurag Pathak Changed status to publish December 15, 2023
