Assertion (A): M3 is larger than M1.
Reason (R): M3 adds the net time deposits of banks to M1.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

M3 = M1 + time deposits, and time deposits are positive. R explains A.

Concept: M1 and M3
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe supply of money: M1 to M4

Practise this chapter →

Ten questions from Money and Its Functions, at your own pace.

Practise this chapter →

Ten questions from Money and Its Functions, at your own pace.

Practise this chapter All 57 questions in Money and Its Functions Revise the notes for Money and Its Functions

Assertion (A): M3 is larger than M1.Reason (R): M3 adds the net time deposits of banks to M1.

Explanation

Assertion (A): M3 is larger than M1.
Reason (R): M3 adds the net time deposits of banks to M1.