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Indian Economy & Institutions · Question 22 of 75

Question 22

MediumOriginal question

Which measure of money supply is known as 'broad money'?

Options for question 22

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. M1 is narrow money: currency with the public plus demand deposits with banks.

  2. M3 adds time deposits with banks to M1, and it is the measure the RBI calls broad money.

  3. M0 is reserve money, the base the RBI itself creates.

Concept
Measures of money supply
Typical time
50 s
Your time
—
The rule this testsMoney, inflation and price indices
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Ten questions from Indian Economy & Institutions, at your own pace.

Practise this chapter →

Ten questions from Indian Economy & Institutions, at your own pace.