Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Broad money without time deposits of post office savings organisation | (I) | High powered money |
| (B) | Money injected by the monetary authority, mainly currency | (II) | Liquidity trap |
| (C) | Money with no intrinsic value | (III) | Aggregate monetary resources |
| (D) | Situation in which speculative demand for money is infinite | (IV) | Fiat money |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
Each description in List-I is the book’s meaning of one term in List-II.
| List-I | List-II | Reason |
|---|---|---|
| (A) Broad money without time deposits of post office savings organisation | (III) Aggregate monetary resources | This is M3, also called aggregate monetary resources. |
| (B) Money injected by the monetary authority, mainly currency | (I) High powered money | Currency issued by the central bank is high powered money. |
| (C) Money with no intrinsic value | (IV) Fiat money | Notes and coins are fiat money: their paper or metal is worth little. |
| (D) Situation in which speculative demand for money is infinite | (II) Liquidity trap | At rmin everyone holds money, so the economy is in a liquidity trap. |
NCERT (2026-27): Glossary: “Aggregate monetary resources - Broad money without time deposits of post office savings organisation (M3).” Glossary: “High powered money - Money injected by the monetary authority in the economy. Consists mainly of currency.” Glossary: “Fiat money - Money with no intrinsic value.” “The Speculative Motive … When r = rmin, the economy is in the liquidity trap. Everyone is sure of a future rise in interest rate and a fall in bond prices. Everyone puts whatever wealth they acquire in the form of money and the speculative demand for money is infinite.” |