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M4

Often called broad money and includes notes and coins in circulation, deposits, repos and securities with a maturity of less than five years held by the non-bank private sector. All the assets included in this monetary aggregate are characterised by being illiquid assets. M4 is a key statistic because it can illustrate the underlying strength of economic activity within a country i.e. during a recession the M4 growth rate usually declines quite rapidly as economic activity diminishes during these periods.

M4 is a key statistic because it can illustrate the underlying strength of economic activity.
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