Question

what is high powered money?​

Answer 1

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High powered money or powerful money refers to that currency that has been issued by the Government and Reserve Bank of India. Some portion of this currency is kept along with the public while rest is kept as funds in Reserve Bank.

1. the total currency circulating in the public,
2. plus the currency that is physically held in the vaults of commercial banks,
3. plus the commercial banks' reserves held in the central bank.

The monetary base should not be confused with the money supply, which consists of the total currency circulating in the public plus certain types of non-bank deposits with commercial banks.

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