Question : Which of the following statements is true?
A) Money Supply is a stock concept
B) Currency and Coins with the public are not included in the M3 measure of money supply
Option 1: Only A
Option 2: Neither A nor B
Option 3: Both A and B
Option 4: Only B
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Correct Answer: Only A
Solution : The correct answer is Only A .
Money Supply is a stock concept which is the total stock of money held at a particular. Currency and coins with the public are included in the M3 measure of money supply.
M3 = M1 + Net time deposits of commercial bank. M1 and M2 are known as narrow money, whereas M3 and M4 are known as broad money.
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