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Zorluk: KolayTypes and Supply of Money

In an economic statistics report of a country, the total currency in circulation outside commercial banks is N300 billion\text{N}300\text{ billion} and demand deposits held in commercial banks total N500 billion\text{N}500\text{ billion}. In addition, savings deposits stand at N250 billion\text{N}250\text{ billion}. What is the value of the narrow money supply (M1M_1) in billions of Naira?

Cevap: 800 billion Naira

Cevap

The narrow money supply (M1M_1) is 800 billion Naira.
Narrow Money (M1M_1) includes only currency outside commercial banks and demand deposits. Adding N300 billion\text{N}300\text{ billion} and N500 billion\text{N}500\text{ billion} gives N800 billion\text{N}800\text{ billion}. Savings deposits are excluded from M1M_1.

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1
Identify the components of Narrow Money (M1M_1).
Narrow Money (M1M_1) consists of currency in circulation outside banks plus demand deposits in commercial banks.
Savings deposits are classified as quasi-money (near money) and belong to Broad Money (M2M_2), not M1M_1.
2
Sum currency outside banks and demand deposits.
N300 billion+N500 billion=N800 billion\text{N}300\text{ billion} + \text{N}500\text{ billion} = \text{N}800\text{ billion}.
Adding these two components gives the narrow money aggregate (M1M_1).

Anahtar Kavram

Components of Narrow Money Supply (M1)
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Konular

Types and Supply of Money

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