Question

What does “Net” imply in net demand deposits?

Options

• Only National Savings Certificates are included in the money supply.

• All deposits with Post Office savings organisations are excluded from the money supply.

• Only deposits of the public held by the banks are included in the money supply.

• All interbank deposits held by commercial banks are included in the money supply.

Answer 1

“Net” means that deposits of the public held by banks are counted. Deposits held by one commercial bank in other commercial banks are not included.