Question

What are the components of the money supply?

Answer 1

The money supply is the total amount of money(currency+deposit money) present in an economy at a particular point in time. The standard measures to define money usually include currency in circulation and demand deposits. Money supply also refers to the total volume of money held by the public at a particular point of time in an economy.

Components of money supply

1. Currency such as notes and coins with the people

2. Demand deposits with the banks such as savings and current account

3. Time deposit with the bank such as Fixed deposit and recurring deposit