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Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.?
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Assertion- Currency held with the government and banks is not included...
Government and Bank Currency Not Included in Money Supply
Currency held with the government and banks is not included in the Money Supply for a specific reason.
Legal Tender for Payments
- Currency, in the form of physical cash, can be legally used to make payments of debts or other obligations.
- This means that currency held with the government and banks is not counted as part of the Money Supply, as it is already in circulation and can be used for transactions.
Definition of Money Supply
- Money Supply refers to the total amount of money available in an economy at a specific point in time.
- It includes currency held by the public, demand deposits in banks, and other liquid assets that can be easily converted into cash.
Exclusion of Government and Bank Currency
- Since currency held with the government and banks is already in circulation and can be used for transactions, it is not considered as part of the Money Supply.
- Including this currency would lead to double-counting, as the same money would be counted both as currency in circulation and as part of the Money Supply.
Implications
- Excluding currency held with the government and banks from the Money Supply helps provide a more accurate picture of the total money available for transactions in the economy.
- It also ensures that the Money Supply is not overstated, which could have implications for monetary policy decisions and economic analysis.
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Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.?
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Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.?.
Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion- Currency held with the government and banks is not included in the Money Supply. Reason – Currency can be legally used to make payments of debts or other obligations.?.
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