Answer:
Money supply refers to the total value of money held by public at a particular point of time. Components of Money Supply (a) \[{{M}_{1}}\]= It is the first and basic measure of money supply. \[{{M}_{1}}\] = Currency and coins with Public + Demand deposits of commercial banks + other deposits. (b)\[{{M}_{2}}\] = It is the broader concept. \[{{M}_{2}}\] = mi + saving deposits with Post Office Saving Bank (c) \[{{M}_{3}}\] = Broader concept \[{{M}_{3}}\] = \[{{M}_{1}}\] + Net time deposits with banks. (d) \[{{M}_{4}}\] = \[{{M}_{3}}\] + Total deposits with post office saving bank (Excluding NSC)
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