What are the different measures of money supply?

Measures of Money Supply : M0, M1, M2, M3 and M4

• Reserve Money (M0): It is also known as High-Powered Money, monetary base, base money etc.
• Narrow Money (M1):
• M2 = M1 + Savings deposits of post office savings banks.
• Broad Money (M3)
• M4 = M3 + All deposits with post office savings banks.

What are the four components of money supply?

Abstract. This study investigates the relationship between the money supply components demand deposits, time deposits, other deposits with RBI and currency in circulation each expressed as a percentage of GDP, inflation and nominal GDP growth.

What is the money supply and what are its two components?

Briefly money supply is the stock of money in circulation on a specific day. Thus two components of money supply are:- (i) currency (Paper notes and coins). (ii) Demand deposits of commercial banks.

How many components are there in money supply?

Components of the Money Supply: Two components of the money supply regulate its structure and flow.

What are the components of M1 measure of money supply?

M1 is a narrow measure of the money supply that includes physical currency, demand deposits, traveler’s checks, and other checkable deposits. M1 does not include financial assets, such as savings accounts and bonds.

What are the measures of money supply Class 12?

Measures of Money Supply OD = other deposits held by the public with Reserve Bank of India. Money Supply M2: M2 is a broader concept of money supply in India than M1. In addition to the three items of M1, the concept of money supply M2 includes savings deposits with the post office savings banks.

What is money list its components?

Define money. List its components.

• M1= currency and coins + demand deposits of commercial banks + other deposits with RBI.
• M2= M1 + Savings deposits with post office savings banks.
• M3= M1 + net time deposits with the bank.
• M4= M1 + total deposits with post office bank.

Which component is not included in the money supply?

Answer: ADVERTISEMENTS: The stock of money held by government and the banking system are not included because they are suppliers or producers of money and cash balances held by them are not in actual circulation. In short, money supply includes currency held by public and net demand deposits in banks.

What is meant by money supply explain M1 measure of money supply?

What is the difference between M1 and M2?

M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks. M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds.