12th Class Economics Solved Paper - Economics 2017 Delhi Set-I

  • question_answer
    State the meaning and components of money supply.


    Money supply refers to the total value of money held by public at a particular point of time.
                Components of Money Supply
    (a) \[{{M}_{1}}\]= It is the first and basic measure of money supply.
    \[{{M}_{1}}\] = Currency and coins with Public + Demand deposits of commercial banks + other deposits.
    (b)\[{{M}_{2}}\] = It is the broader concept.
    \[{{M}_{2}}\] = mi + saving deposits with Post Office Saving Bank
    (c) \[{{M}_{3}}\] = Broader concept
    \[{{M}_{3}}\] = \[{{M}_{1}}\] + Net time deposits with banks.
    (d) \[{{M}_{4}}\] = \[{{M}_{3}}\] + Total deposits with post office saving bank (Excluding NSC)                                 

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