Which of the following is NOT a measure of money supply?Question 19Answera.M1b.M2c.M3d.GDP
Question
Which of the following is NOT a measure of money supply?
Answera.
- M1
- M2
- M3
- GDP
Solution
The measure that is NOT a part of the money supply is d. GDP (Gross Domestic Product).
Here's why:
a. M1: This is a measure of the money supply that includes physical currency and coin, demand deposits, travelers checks, and other checkable deposits.
b. M2: This is a measure of the money supply that includes M1, as well as saving deposits, certificates of deposit (less than $100,000), and money market deposits for individuals.
c. M3: This is a measure of the money supply that includes M2, as well as large time deposits, institutional money market funds, short-term repurchase agreements, along with other larger liquid assets.
d. GDP (Gross Domestic Product): This is NOT a measure of the money supply. Instead, it is a broad measure of the overall economic activity within a country. It represents the total value of all goods and services produced over a specific time period within a country's borders.
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