What items are not included in
M1 measure of supply?
Currency and coins with public
Inter-bank deposits
Other deposits with RBI
Net demand deposits with banks
Answers
Answer:
ADVERTISEMENTS: The stock of money held by government and the banking system are not included because they are suppliers or producers of money and cash balances held by them are not in actual circulation. In short, money supply includes currency held by public and net demand deposits in banks.
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Answer:
True.
Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time.
Money supply is measured in several ways among which M1 is a type of measurement that measures the money as a medium of exchange function.
M1= C+ DD+ OD
where,
C: It refers to currency held by public in terms of coins and paper notes.
DD: It refers demand deposits of the people with the commercial bank.
OD: These includes other deposits with public financial institution, foreign central banks and international financial institution.
Explanation: