Question

4.M. Component of Money Supply:
M4 is the sum of M3 and the Post Office Savings Deposits. It represents broader concept of money supply. Thus,
M4=M3 + Post Office Savings Deposits​

Answer 1

Answer:

(a) M3, and

(b) Total deposits with post office saving organisation (excluding National Saving Certificates).

M4 measure of money supply which is the least liquid is not used for policy formulation because the total deposits with post office saving organisation do not come under the purview of the Reserve Bank.

M0 is Reserve Money, M1 is Narrow Money and M3 is Broad Money