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Which of the following statement is correct ? |
Money supply means cash reserves of banks. Money supply includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank. Money supply refers to currency held by the public in terms of coins and paper notes by the public at point of time. Money supply includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank and also the cash reserves of banks. |
Money supply includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank. |
The correct answer is option 2: Money supply includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank. 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. Money supply includes both currency held by the public in terms of coins and paper notes as well as demand deposits of the people with the commercial bank. |
