Question : Savings deposits with post office savings banks are included in which measure of money supply?
Option 1: M3
Option 2: M2 and M4
Option 3: M4
Option 4: M1
Correct Answer: M2 and M4
Solution : The correct option is M2 and M4 .
Post office savings are included in M2 and M4. The M2 measurement of the money supply in India includes the saving deposits of post office saving banks, which gives it a bit more rigidity than the M1 measurement. In India, the post office offers a deposit programme called the post office savings account. To calculate and gauge the total supply of money in the market, the Reserve Bank of India (RBI) divides currency into four major categories known as monetary aggregates.
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