CA Foundation P4 · Chapter 8 · Question 7 of 15
In the RBI's monetary aggregates, broad money (M3) is equal to:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) M1 plus net time deposits with the banking system
Explanation
M1 = currency with the public + demand deposits with banks + other deposits with RBI. M3 = M1 + net time deposits of the banking system. M2 adds post office savings deposits to M1. Currency plus bankers' deposits with RBI form part of reserve money (M0).
More Money Market MCQs
- Q9Reserve money (high-powered money) consists of:
- Q10When the central bank purchases government securities in the open market, it:
- Q11An increase in the cash reserve ratio (CRR) will, other things being equal:
- Q12The repo rate is the rate at which:
- Q13Under the amended RBI Act, 1934, the policy repo rate required to achieve the inflation target is determined by: