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Which of the following are included in broad money (M 3) in India ? 1. Currency with the public 2.…

In India, broad money \(M_3\) equals \(M_1\) plus time deposits with banks, and \(M_1\) is currency with the public plus demand deposits with banks plus "other deposits"…

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Which of the following are included in broad money (M 3) in India ?
1. Currency with the public
2. Demand deposits with Bank
3. Time deposits with Banks
4. ‘Other deposits’ with RBI

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Answer and explanation

Correct answer D

In India, broad money M3M_3 equals M1M_1 plus time deposits with banks, and M1M_1 is currency with the public plus demand deposits with banks plus "other deposits" with the RBI. So all four items are included in M3M_3. Leaving out the RBI's other deposits is the usual slip, but they are part of M1M_1 and therefore of M3M_3.

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