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Question

Which of the following is not a component of M1 measurement of money supply?

A
Demand deposits
B
Currency
C
Other deposits
D
Term deposits
Solution
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Correct option is D. Term deposits
M1 is a narrow measure of the money supply that includes physical currency, demand deposits, traveler's checks, and other checkable deposits. M1 does not include financial assets, such as savings accounts, term deposits, and bonds.

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