M4 is a measure of money supply that includes the total amount of money in circulation in the economy, as well as deposits in savings accounts, time deposits, and certificates of deposit.


Liquidity refers to the ease and speed at which an asset can be converted into cash without losing its value. The more liquid an asset is, the easier it is to sell and convert into cash.


There are several reasons why M4 is considered the least liquid measure of money supply:

• Savings Deposits: Savings deposits are included in M4, but they are not as liquid as other forms of money. Banks require notice before withdrawal, and there may be penalties for early withdrawal. This makes savings deposits less liquid than other forms of money, such as cash or checking account deposits.



• Time Deposits: Time deposits, such as certificates of deposit, are also included in M4. These deposits are not as liquid as other forms of money because they have a fixed term and cannot be withdrawn before maturity without penalty.



• Limited Acceptance: M4 includes assets that may have limited acceptance as a medium of exchange. For example, some forms of M4 may not be accepted as payment in certain transactions, which reduces their liquidity.



• Difficulty in Valuation: Some forms of M4 may be difficult to value, which makes them less liquid. For example, valuing stocks or bonds can be difficult and may require the assistance of a financial professional.

In conclusion, M4 is considered the least liquid measure of money supply because it includes assets that are not as easily converted into cash without losing value. Savings deposits, time deposits, limited acceptance, and difficulty in valuation are all factors that contribute to M4's lower liquidity compared to other measures of money supply.

Yes it's true because it includes aggregate monetary resources of d society.......M4=M3+total deposit with post office savings......but if u r from CBSE ....than u know what only M1 is in our syllabus .....so no need to study all d measures...