ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!


    Question

    The total liability of the monetary authority of India

    i.e. RBI, is included in which of the following?
    A Monetary base Correct Answer Incorrect Answer
    B High powered money Correct Answer Incorrect Answer
    C Narrow Money Correct Answer Incorrect Answer
    D Both (a) and (b) Correct Answer Incorrect Answer
    E Both (a) and (c) Correct Answer Incorrect Answer

    Solution

    Monetary base and high-powered money both include the total liability of RBI ┬╖┬а┬а┬а┬а┬а┬а┬а┬а The Monetary base includes bank reserve and currency in circulation. ┬╖┬а┬а┬а┬а┬а┬а┬а┬а High Power Money (Reserve Money or Base Money) тАУ High power money is the base of money supply expansion in the economy. ┬а High Power Money = C + OD + CR. C = Currency with the public OD = Other Deposits of the general public with the RBI (insignificant) CR = Cash Reserves of banks which consists of (i.) Cash with banks themselves and (ii) Bankers deposits with RBI.

    Practice Next
    More RBI and Monetary Policy Questions
    ask-question