Question

RBI has adopted four measures of money supply. In this, M₃ comprises:

Options

• M₁ + Saving deposits of post office.

• M₁ + Net time deposits with banks.

• M₁ + Total deposits with post office saving.

• Cash + Demand deposits + other deposits.

Answer 1

M₁ + Net time deposits with banks.

Explanation:

Demand deposits and net time deposits with the bank are included in the M₃ concept, also referred to as “Broad Money,” which comprises M₁, or currency held by the public.