Question on: JAMB Economics - 2019
The term M \(^3\) comprises M \(^1\) together with deposits on deposit account held by_______
A
banks only
B
discount houses only
C
banks and discount houses
D
banks, discount houses and stock, exchanges
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Correct Option: C
The term M3, in monetary economics, represents a broad measure of the money supply. It includes M1 (which comprises currency in circulation and demand deposits) plus time deposits, savings deposits, and other less liquid forms of money. Since the question specifies "deposits on deposit account," we're referring to those held by banks. Discount houses and stock exchanges don't typically hold deposit accounts in the same way that banks do.
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