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Question :  Which of the following is included in the M1 measure of money supply?

A) Currency with Public

B) Time Deposit with Post Office

C) Demand Deposits with Commercial Banks/RBI of Public Financial Institutions

Option 1: Both B and C

Option 2: Both A and C

Option 3: Only B

Option 4: Only A


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: Both A and C


Solution : The correct option is Both A and C .

In the M1 measure of money supply, the following is included: Currency with the Public and Demand Deposits with Commercial Banks/RBIs of Public Financial Institutions. M1 includes the most liquid components of the money supply, such as physical currency (coins and paper money) in the hands of the public and demand deposits with commercial banks. Time deposits and other less liquid assets, such as time deposits with the Post Office, are not part of M1 but are part of broader measures of money supply, such as M2 or M3.

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