Two main components of money supply are __________.

currency and demand deposits

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currency and coins

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demand deposits and time deposits

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all of the above

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Solution

The correct option is A currency and demand deposits
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 includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank.

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