Broad Money (M4) comprises which?

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Multiple Choice

Broad Money (M4) comprises which?

Explanation:
Broad Money (M4) measures the money readily available for spending by the private sector, stacking cash in circulation with the deposits people and businesses hold in banks. It includes notes and coins outside banks plus all private sector bank accounts, because both cash and bank deposits can be used to make payments. Central bank reserves aren’t part of M4 since they are funds banks hold at the central bank and aren’t directly spendable by households or firms. So the proper description is cash in circulation plus private sector bank deposits.

Broad Money (M4) measures the money readily available for spending by the private sector, stacking cash in circulation with the deposits people and businesses hold in banks. It includes notes and coins outside banks plus all private sector bank accounts, because both cash and bank deposits can be used to make payments. Central bank reserves aren’t part of M4 since they are funds banks hold at the central bank and aren’t directly spendable by households or firms. So the proper description is cash in circulation plus private sector bank deposits.

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