Question

why are M1 and M2 known as narrow money​

Answer 1

Answer:

The name is derived from the fact that M1/M0 are the narrowest or most restrictive forms of money that are the basis for the medium of exchange within an economy. ... The narrow money supply only contains the most liquid financial assets.

Explanation:

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Answer 2

Answer:

The name 'Narrow Money' derives from the fact that M1/M0 are the narrowest or most restrictive types of money that form the basis for an economy's medium of exchange. The narrow supply of money includes only the most liquid financial assets. These funds must be available on-demand.

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