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Question
According to 1979 classification of money stock by RBI _______.
According to 1979 classification of money stock by RBI _______.
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Solution
The correct option is C M1= Coins + notes + demand deposits of public
Money stock refers to the total stock of money of all types ( currency as well as deposits) held by the people of a country at a given point of time. Money supply is measured in several ways which includes M1, M2, M3 and M4 measurement of money supply.. Every measurement has it own definition with different components
varying from most liquid to most rigid form. According to 1979 classification of money stock by Reserve Bank of India(RBI),
M1= C+N+ DD
where,
C: It referred to currency held by public in terms of coins.
N: It referred to currency held by public in terms of notes.
DD: It referred demand deposits of the people with the commercial bank.
Money stock refers to the total stock of money of all types ( currency as well as deposits) held by the people of a country at a given point of time. Money supply is measured in several ways which includes M1, M2, M3 and M4 measurement of money supply.. Every measurement has it own definition with different components varying from most liquid to most rigid form. According to 1979 classification of money stock by Reserve Bank of India(RBI),
M1= C+N+ DD
where,
C: It referred to currency held by public in terms of coins.
N: It referred to currency held by public in terms of notes.
DD: It referred demand deposits of the people with the commercial bank.
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