In: Economics
a) Identify and explain the three functions of Money.
b) What comprises the M1 definition of money?
Ans .
a)3 functions of money are -
b) M1 - it is a narrow measure of supply of money which is made up of currencies which are physical and coins , checkable and demand deposits , NOW ( negotiable order of withdrawal ) accounts and travelers checks , it mainly holds all the money portion which have high liquidity in nature , thatswhy it mostly comprises of assets and currency which have high conversion with cash .
Note - Currency and coins in circulation are the biggest and largest components of M1.
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