how does RBI classify the supply of money ? (6 marks question )
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Answer:
RBI controls cash supply in the market through different devices and measures.
CRR - Cash Reserve Ratio is the extent of all out stores that the banks are required to keep up with the RBI has saves.
This discourse on How does RBI order the supply of cash? is done on EduRev Study Group by CA CPT Students.
The Reserve Bank of India does not pursue or plainly expresses any hypothesis of cash supplyor cash stock.
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RBI classifies the supply of money through tools called CRR (Cash Reserve Ratio).
What are the sources of the money supply by RBI?
They supply by four ways:
- M1: The RBI supply money through deposits money in a bank and from savings accounts
- M2: The money deposits in post office accounts are supplied by RBI
- M3: All-time deposit money are supplied
- M4: It includes both money deposited in M2 and M3
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