| The sum of which of the following constitutes Broad Money in India? |
| A. currency with the public |
| B. demand deposits with banks |
| C. time deposits with banks |
| D. other deposits with RBI |
A) A and B
B) A, B and C
C) A, B, C and D
D) A, B and D
Correct Answer: B
Solution :
[b] The four main monetary aggregates of measures of money supply which reflect the state of the monetary sectorare: (i) M1 (Narrow money) = Currency with the public + demand deposits of the public; (ii) M2 = M1 + Post Office Savings deposits; (iii) M3 (Broad money) = M1 + time deposits of the public with banks; and (iv) M4 = M3 + Total post office deposits.
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