The term 'deposits with banks with maturity over one year' comes under the M-3 definition of money. Explanation:There are four measures of money in the economy, commonly referred to as M-1, M-2, M-3, and M-4. Each measure includes different components of the money supply:M-1:- Currency in circulation (coins and notes)- Demand deposits (checking accounts)- Traveler's checksM-2:- All components of M-1- Savings deposits- Small denomination time deposits (certificates of deposit less than $100,000)- Money market deposit accountsM-3:- All components of M-2- Large denomination time deposits (certificates of deposit of $100,000 or more)- Institutional money market funds- Deposits with banks with maturity over one yearM-4:- All components of M-3- Other liquid assets, such as Treasury bills and commercial paperThe term 'deposits with banks with maturity over one year' falls under the M-3 definition of money because it includes large denomination time deposits and other less liquid assets in addition to the components of M-2.

Definition of Money

Money is a medium of exchange that is widely accepted in transactions in an economy. The different types of money are categorized based on their liquidity, which refers to the ease with which they can be converted into cash. The three main definitions of money are:

- M1: M1 is the most liquid form of money and includes physical currency in circulation, demand deposits, and other checkable deposits.
- M2: M2 includes all of M1 plus savings deposits, time deposits, and money market mutual funds.
- M3: M3 includes all of M2 plus large time deposits, institutional money market funds, and other large liquid assets.

Term Deposits with Banks with Maturity Over One Year

Term deposits are a type of savings account that requires the account holder to deposit their funds for a fixed period of time. The interest rate on term deposits is generally higher than that on savings accounts, but the account holder cannot withdraw their funds before the maturity date without incurring a penalty.

The term deposits with banks with maturity over one year are included in the M3 definition of money. This is because they are considered to be less liquid than other forms of money, such as demand deposits, and cannot be immediately converted into cash. However, they are still considered to be a form of money because they can be used to make payments and are accepted as a store of value.

Conclusion

In conclusion, the term deposits with banks with maturity over one year are included in the M3 definition of money because they are less liquid than other forms of money but can still be used as a medium of exchange and a store of value.