The currency issued by the Reserve Bank of India is called
- High powered money
- Reserve money
- Bank money
- Monetary base
- Fiscal base
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
High-powered money basically refers to the liability of the monetary authority of the country. A monetary authority is an entity that manages a country's currency and money supply. The Reserve Bank of India is the monetary authority of India. High-powered money is also called as the monetary base and is created by the RBI. Reserve money is also called central bank money, monetary base, base money, or high-powered money. It is the base level for the money supply or the high-powered component of the money supply. We can simply say that, Reserve Money is Currency in Circulation plus Deposits of Commercial Banks with RBI.