| 1. \[{{M}^{1}}\]Money with the Public (currency notes and coins) + Demand deposits of banks (on current and saving bank accounts) + Other demand deposits with RBI. It is highly liquid and banks will not be able to run their lending programmes on this basis. |
| 2. \[{{M}^{2}}\]: \[{{M}^{1}}\]+ Saving bank deposits with Post-offices. |
| 3. \[{{M}^{3}}\]: \[{{M}^{2}}\] + Term deposits with the bank. |
| 4. \[{{M}^{4}}\]: \[{{M}^{3}}\] + All deposits of Post-offices. |
A) 1, 2, 3, 4
B) 1, 2, 3
C) 1, 3, 4
D) 1, 2, 4
Correct Answer: D
Solution :
The four concepts of money used in calculating money supply are known as the money stock measures or measures of monetary aggregates. These are Ml, M2,\[{{M}^{3}}\], \[{{M}^{4}}\], \[{{M}^{3}}\]: \[{{M}^{1}}\]+ Term deposits with the bank.
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