Site navigation

Net Time Deposits of Commercial Banks are constituent of which measures of money supply?

In the Reserve Bank of India's monetary aggregates, narrow money \(\mathrm{M}_1\) consists of currency with the public, demand deposits with banks, and 'other' deposits with…

Choose your answer

Net Time Deposits of Commercial Banks are constituent of which measures of money supply?

Select one answer
Answer and explanation

Correct answer A

In the Reserve Bank of India's monetary aggregates, narrow money M1\mathrm{M}_1 consists of currency with the public, demand deposits with banks, and 'other' deposits with the RBI, while M2=M1+post office savings bank deposits\mathrm{M}_2 = \mathrm{M}_1 + \text{post office savings bank deposits}. Broad money is defined as M3=M1+net time deposits of commercial banks\mathrm{M}_3 = \mathrm{M}_1 + \text{net time deposits of commercial banks}, and M4=M3+total deposits with post office savings organisations (excluding National Savings Certificates)\mathrm{M}_4 = \mathrm{M}_3 + \text{total deposits with post office savings organisations (excluding National Savings Certificates)}. Therefore, net time deposits of commercial banks are a constituent of both M3 and M4.

Practice for these exams

  • RPSC Senior Teacher Grade II

Related question papers

Related exam syllabi

Related questions in this topic