M2 is one of the measures of money supply. M2 is the sum of M1 + ______________.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. saving deposits with post office.
M2 is one of the measures of money supply and is defined as the sum of M1 (which includes coins and currency notes, demand deposits, and other liquid assets) plus saving deposits with post offices and savings accounts in banks. This broader measure of money supply includes M1 and adds less liquid forms of money, reflecting a more comprehensive view of the money available in the economy for spending and saving.