___________ is the most liquid money supply in India.
___________ is the most liquid money supply in India.
The correct option is A M1
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.
M1 measurement of money supply is the most liquid money supply in India as it just includes currency held by the
public in terms of coins and paper notes, demand deposits of the
people with the commercial banks and some other deposits with other financial institutions.
M1= C+ DD+
OD
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.
M1 measurement of money supply is the most liquid money supply in India as it just includes currency held by the public in terms of coins and paper notes, demand deposits of the people with the commercial banks and some other deposits with other financial institutions.
M1= C+ DD+ OD
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.
