The money supply comprises of which of the following?

is comprised only of Bank of Canada notes and coins in circulation.

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is comprised only of the deposits of the chartered banks at the Bank of Canada.

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is a broad definition of financial assets available for use in payments.

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includes all forms of liquid and less liquid assets such as currency in circulation, term deposits, chequing and savings account deposits, and Canada savings bonds.

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Solution

The correct option is C is a broad definition of financial assets available for use in payments.

Money supply is the entire stock of currency and other liquid instruments circulating in a country's economy as of a particular time. Also referred to as money stock, money supply includes safe assets, such as cash, coins, and balances held in checking and savings accounts that businesses and individuals can use to make payments or hold as short-term investments.

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Similar questions

Consider the following statements related to money supply:-

Which of the above statements are incorrect?

2 and 3 only
2, 3 and 4 only
1, 2 and 4 only
1, 2 and 3 only

Q. In terms of money supply,

Currency note and coins in circulation + Net demand deposits held in commercial banks = _____

Q. Consider the following statements with respect to’ money supply’ in the economy:

Which of the statements given above is/are correct?

1 only
2 only
Both 1 and 2
Neither 1 nor 2

Q. Which of the following statements about banking operations is correct as they help banks to run their shops?
A. The public holds as much currency (M) as it desires to hold with it and therefore any additional money earned by it is placed in the form of deposits with banks.
B. The banks lend all the deposits received by them from public up to the minimum legal cash reserve ratio requirement determined by the RBI. It means banks do not keep any excess cash reserves with themselves.
C. The minimum legal Cash Reserve ratio is set by the RBI.
D. Bank's assets are only in the form of Cash Reserves and loans and its liabilities comprise only of the demand deposits.

Q. Which among the following represents the currency notes and coins as well as net demand deposits held in commercial banks?

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