Which of the following statement is correct ?
Answer & explanation
Correct answer: option 2
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.