Out of the various types of M1 (demand deposits,coins and bank notes),only demand deposits

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Demand deposits are the only type of M1 that can be used to generate loans by banks. Coins and bank notes are physical forms of currency while demand deposits are digital records of funds held at a bank that can be used to create loans for individuals or businesses. However, all forms of M1 can serve as a medium of exchange, unit of account, and store of value.

Out of the Various Types of M1 (Demand Deposits,coins and Bank