The term M ³ comprises M ¹ together with deposits on deposit account held by_______

Correct Answer is : banks and discount houses

banks, discount houses and stock, exchanges

Correct Answer is : banks and discount houses

Test Index

JAMB Economics 2019 Paper

Question : 53

Total: 80

The term M

^3

^1

Solution:

Concept:

M^3

is a broad measure of money supply that builds on

M^1

Explanation:

M^1

consists of currency in circulation plus demand deposits.

M^3

is a wider measure of money supply.

It includes

M^1

together with deposits held in deposit accounts.

These deposit accounts are held with banks and discount houses.

So,

M^3 = M^1 + \text{deposits on deposit accounts held by banks and discount houses}

Answer:

C. banks and discount houses

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