Commerce Exam > Commerce Questions > Directions: In the following questions, a st...
Start Learning for Free
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): M4 is the least liquid measure of money supply.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
- a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).
- b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
- c)Assertion (A) is true but reason (R) is false.
- d)Assertion (A) is false but reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Directions: In the following questions, a statement of assertion (A) ...
Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time.
View all questions of this test
Money supply is measured in several ways which includes M1, M2, M3 and M4 measurement of money supply. Every measurement has its own definition with different components varying from most liquid to most rigid form.
M4 measurement of money supply is the least liquid money supply in India as it includes all the other deposits of post office savings other than national savings certificates.
M4 = M3 + Total deposits with post offices other than in the form of national saving certificate
In which, M3 = C+ DD+ OD + net time deposits with the commercial banks
where,
C: It refers to currency held by the public in terms of coins and paper notes.
DD: It refers to the demand deposits of the people with the commercial bank.
OD: These include other deposits with public financial institutions, foreign central banks and international financial institutions.
Most Upvoted Answer
Directions: In the following questions, a statement of assertion (A) ...
Assertion (A): M4 is the least liquid measure of money supply.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
To determine the correctness of the given assertion and reason, let's analyze each statement separately.
Assertion (A): M4 is the least liquid measure of money supply.
- M4 is a measure of money supply that includes all the components of M3 (which includes M1 and M2) as well as some additional components such as time deposits, certificates of deposit, and other long-term deposits.
- These additional components in M4 make it less liquid compared to M3, M2, and M1. Liquidity refers to how easily an asset can be converted into cash without significant loss of value.
- Since M4 includes more illiquid components, it is considered the least liquid measure of money supply.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
- This reason states that M4 includes all the money supply components included in M3 as well as the Total Deposits with the Post Office.
- M3 includes M2 (which includes M1) plus some additional components such as time deposits and savings deposits.
- The Total Deposits with the Post Office, which are considered part of M4, are not included in M3. These deposits are relatively illiquid as they typically have longer lock-in periods and withdrawal restrictions.
- Therefore, M4 is inclusive of all the components of M3 as well as the Total Deposits with the Post Office.
Explanation:
Both the assertion and reason are true, and the reason correctly explains the assertion.
Conclusion:
Option A is the correct answer as it states that both the assertion and reason are true, and the reason is the correct explanation of the assertion.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
To determine the correctness of the given assertion and reason, let's analyze each statement separately.
Assertion (A): M4 is the least liquid measure of money supply.
- M4 is a measure of money supply that includes all the components of M3 (which includes M1 and M2) as well as some additional components such as time deposits, certificates of deposit, and other long-term deposits.
- These additional components in M4 make it less liquid compared to M3, M2, and M1. Liquidity refers to how easily an asset can be converted into cash without significant loss of value.
- Since M4 includes more illiquid components, it is considered the least liquid measure of money supply.
Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.
- This reason states that M4 includes all the money supply components included in M3 as well as the Total Deposits with the Post Office.
- M3 includes M2 (which includes M1) plus some additional components such as time deposits and savings deposits.
- The Total Deposits with the Post Office, which are considered part of M4, are not included in M3. These deposits are relatively illiquid as they typically have longer lock-in periods and withdrawal restrictions.
- Therefore, M4 is inclusive of all the components of M3 as well as the Total Deposits with the Post Office.
Explanation:
Both the assertion and reason are true, and the reason correctly explains the assertion.
Conclusion:
Option A is the correct answer as it states that both the assertion and reason are true, and the reason is the correct explanation of the assertion.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
Question Description
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): M4 is the least liquid measure of money supply.Reason (R): M4 is inclusive of all the money supply included in M3 as well as the Total Deposits with the Post Office.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce 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