________ is the least liquid money supply in India.
________ is the least liquid money supply in India.
The correct option is D M4
Money supply refers to the total stock of money of all types ( currency as well as demand 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.
M4 measurement of money supply is the least liquid money supply in India as it includes all the other deposits of post office savings other than national savings certificate.
M4 = M3 + Total deposits with post offices other than in the form of national saving certificate
In which, M3 = C+ DD+ OD + net time deposits with the commercial banks
where,
C: It refers to currency held by public in terms of coins and paper notes.
DD: It refers demand deposits of the people with the commercial bank.
OD: These includes other deposits with public financial institution, foreign central banks and international financial institution.
Money supply refers to the total stock of money of all types ( currency as well as demand 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.
M4 measurement of money supply is the least liquid money supply in India as it includes all the other deposits of post office savings other than national savings certificate.
M4 = M3 + Total deposits with post offices other than in the form of national saving certificate
In which, M3 = C+ DD+ OD + net time deposits with the commercial banks
where,
C: It refers to currency held by public in terms of coins and paper notes.
DD: It refers demand deposits of the people with the commercial bank.
OD: These includes other deposits with public financial institution, foreign central banks and international financial institution.
