"Money supply" is considered as which of the following variable?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A stock variable, measured at a point of time
Money supply is the total stock of money with the public at a particular point of time. A stock is always measured at a point of time; a flow is measured over a period.
NCERT (2026-27): “Legal Definitions: Narrow and Broad Money Money supply, like money demand, is a stock variable. The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4. They are defined as follows |