Q. Which of the following money component is least liquid of all money components?
Explanation: 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.
Source: NCERT – Indian Economy