Question

Consider the following components of money supply in India:
1. Currency in circulation
2. Banker's deposits with the NBI
3. Other deposits with the RBI
4. Demand deposits of banks
Which of the above are the components of Reserve Money?

• A. $1$ and $3$
• B. $1,2$ and $3$
• C. $1,2$ and $4$
• D. $2,3$ and $4$

Answer 1

Answer: (B)

$1,2$ and $3$

RBI's Reserve Money (RM) includes as:
(i) Currency is circulation
(ii) Banker's Deposits with RBI
(iii) Other Deposits with RBI.