Question

Which of the following is not included in money supply?
(a) High powered money
(b) Bank money
(c) Time deposits
(d) Interbank deposits​

Answer 1

Answer:

Interbank deposit is not included in the money supply

Explanation:

Money supply:

• The total amount of currency, coins, and bank account balances in circulation is known as the money supply.
• The money supply is typically understood as a collection of safe assets that individuals, businesses, and governments can use to make payments or hold as short-term investments.

Importance of money supply:

• When the growth of the money supply exceeds the economy's capacity to create goods and services also increase it will results in inflation.
• Additionally, a money supply that does not expand quickly enough might cause production to decrease, which then causes demand to fall.

The  components of money supply:

• Operates as a bank for bankers.
• Controls capital issues in his role.
• Issues different denominations of currency.
• Serves as a lender of last resort for industrial firms in financial distress.

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Answer 2

Answer:

Which of the following is not included in money supply?

(d) Interbank deposits​

Explanation:

• Interbank deposits are not included in the money supply.
• Money supply is the the total amount of money which is in circulation or in the existence of the country.
• Money supply is the topic of the Macroeconomics. There are four types of money which are- commercial money, fiduciary money, fiat money, commodity money.
• High power money is the liability of the monetary authority of any country. H= C+R.
• DD or non- confidential money are bank money. It is the medium of exchange which consist chiefly of cheques and drafts.
• Time deposit is the interest bearing bank which has a date of maturity.
• Interbank deposit name suggest its real meaning- that it is an arrangement between two banks.

Hence, interbank deposit is not included in money supply.