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    Question

    Match the following:

    A) M0 P) broad money

    B) M1 Q) monetary base

    C) M2 R) narrow money

    D) M3 S) broad money

    A A-P, B-S, C-R, D-Q Correct Answer Incorrect Answer
    B A-R, B-P, C-S, D-Q Correct Answer Incorrect Answer
    C A-R, B-S, C-Q, D-P Correct Answer Incorrect Answer
    D A-Q, B-R, C-P, D-S Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    M0 (monetary base) = Currency in Circulation + Bankers' Deposits with the RBI + 'Other' Deposits with the RBI M1 (narrow money) = Currency with the Public + Demand Deposits with the Banking System + 'Other' Deposits with the RBI M2 and M3 (broad money) M2 = M1 + Time Liabilities Portion of Savings Deposits with the Banking System + Certificates of Deposit issued by Banks + Term Deposits of residents with a contractual maturity of up to and including one year with the Banking System (excluding CDs) M3 = M2 + Term Deposits of residents with a contractual maturity of over one year with the Banking System + Call/Term borrowings from 'Non-depository' Financial Corporations by the Banking System For details please read at https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=293

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