Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | M1 | (I) | Narrow money that includes savings deposits with Post Office savings banks |
| (B) | M2 | (II) | Least liquid of all the measures |
| (C) | M3 | (III) | Most liquid and easiest for transactions |
| (D) | M4 | (IV) | Most commonly used measure of money supply |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
M1 to M4 are in decreasing order of liquidity. M1 and M2 are narrow money; M3 and M4 are broad money.
| List-I | List-II | Reason |
|---|---|---|
| (A) M1 | (III) Most liquid and easiest for transactions | It is currency with the public plus demand deposits, ready to spend. |
| (B) M2 | (I) Narrow money that includes savings deposits with Post Office savings banks | M2 = M1 + Post Office savings bank deposits. |
| (C) M3 | (IV) Most commonly used measure of money supply | M3 is also called aggregate monetary resources. |
| (D) M4 | (II) Least liquid of all the measures | It is last in the order of liquidity. |
NCERT (2026-27): “Legal Definitions: Narrow and Broad Money … They are defined as follows |