UPSC Exam > UPSC Questions > Which of the following about money supply mea...
Start Learning for Free
Which of the following about money supply measures adopted in 1998 is wrong?
- a)M1= currency with public +demand deposits with banking system + other deposits with RBI
- b)M2= M1 + savings deposits of post office savings bank
- c)M3= M1+ time deposits with banking system
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Which of the following about money supply measures adopted in 1998 is ...
M4= M3+ all deposits with post office savings banks excluding National Savings Certificate.
Most Upvoted Answer
Which of the following about money supply measures adopted in 1998 is ...
Money Supply Measures Adopted in 1998
In 1998, the Reserve Bank of India (RBI) adopted new measures to define and measure money supply in the economy. These measures are still in use today. Let's take a look at each measure:
M1
M1 is the narrowest measure of money supply and includes the following components:
- Currency with the public: This includes all notes and coins that are in circulation outside the banking system.
- Demand deposits with the banking system: This includes all funds that are deposited in checking accounts or current accounts.
- Other deposits with the RBI: This includes deposits that commercial banks hold with the RBI, such as statutory reserves and cash reserves.
M2
M2 is a broader measure of money supply and includes all components of M1, as well as the following:
- Savings deposits of post office savings bank: This includes all funds that are deposited in savings accounts at post offices.
- Small savings schemes: This includes all funds that are invested in small savings schemes like National Savings Certificates (NSC), Kisan Vikas Patra (KVP), etc.
M3
M3 is the broadest measure of money supply and includes all components of M1 and M2, as well as the following:
- Time deposits with the banking system: This includes all funds that are deposited in fixed deposits or time deposits with commercial banks.
Incorrect Option
The question asks us to identify which of the following about the money supply measures adopted in 1998 is wrong. However, all of the options listed are correct. Therefore, the correct answer to the question is option 'D' which states that none of the above options are wrong.
In 1998, the Reserve Bank of India (RBI) adopted new measures to define and measure money supply in the economy. These measures are still in use today. Let's take a look at each measure:
M1
M1 is the narrowest measure of money supply and includes the following components:
- Currency with the public: This includes all notes and coins that are in circulation outside the banking system.
- Demand deposits with the banking system: This includes all funds that are deposited in checking accounts or current accounts.
- Other deposits with the RBI: This includes deposits that commercial banks hold with the RBI, such as statutory reserves and cash reserves.
M2
M2 is a broader measure of money supply and includes all components of M1, as well as the following:
- Savings deposits of post office savings bank: This includes all funds that are deposited in savings accounts at post offices.
- Small savings schemes: This includes all funds that are invested in small savings schemes like National Savings Certificates (NSC), Kisan Vikas Patra (KVP), etc.
M3
M3 is the broadest measure of money supply and includes all components of M1 and M2, as well as the following:
- Time deposits with the banking system: This includes all funds that are deposited in fixed deposits or time deposits with commercial banks.
Incorrect Option
The question asks us to identify which of the following about the money supply measures adopted in 1998 is wrong. However, all of the options listed are correct. Therefore, the correct answer to the question is option 'D' which states that none of the above options are wrong.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer?
Question Description
Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer?.
Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following about money supply measures adopted in 1998 is wrong?a)M1= currency with public +demand deposits with banking system + other deposits with RBIb)M2= M1 + savings deposits of post office savings bankc)M3= M1+ time deposits with banking systemd)None of the aboveCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup