Arrange the following conditions from most to least liquid form:

(A) Currency + Demand Deposit +Savings deposits with Post Office savings banks.
(B) Currency + Demand Deposit + Net time deposits of commercial banks + Total deposits with Post Office savings organizations.
(C) Currency + Demand Deposit.
(D) Currency + Demand Deposit + Net time deposits of commercial banks.

Choose the correct answer from the options given below:

(C), (A), (D), (B)

The correct answer is Option (2) → (C), (A), (D), (B)

(C) Currency + Demand Deposit. =  M1
(A) Currency + Demand Deposit +Savings deposits with Post Office savings banks =  M2
(D) Currency + Demand Deposit + Net time deposits of commercial banks = M3
(B) Currency + Demand Deposit + Net time deposits of commercial banks + Total deposits with Post Office savings organizations = M4

M1 and M2 are known as narrow money. 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. M3 is the most commonly used measure of money supply. It is also known as aggregate monetary resources.