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WAEC Economics 1995 Question 24

Question 24

Money and Inflation

Which of the following constitutes the major component of money supply in a developed economy?

  1. A.Demand deposits
  2. B.Paper money
  3. C.Bank drafts
  4. D.Coins
  5. E.Time deposits
Show the answer and explanation

Answer: A (Demand deposits)

Explanation

In developed economies most payments are made by cheque, so demand deposits form the largest part of money supply.