M1 is also known as transaction money (True or False with Reasons)
True or False with Reasons
M1 is also known as transaction money.
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True,
As M1 can be directly used for making transactions.
Money supply consists of:
1. Currency with the public
2. Demand deposits of the public with the banks.
These two components of the money supply are also known as ‘Transaction Money’ as they can be directly used for carrying out transactions at will.
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