What is true of the M1 category of money?
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M1 category of money supply are the actual, physical currencies and coins, demand deposits, travellers’ cheques etc., which are the most ‘liquid’ of money supply, in the market. In other words, they are already cash or are the most easily converted to cash.
M2 and M3 category of cash take more time to convert to cash – such as short-term deposits etc. M2 includes M1 and M3 includes M2 categories.
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