____ is the main source of money supply in an economy.
____ is the main source of money supply in an economy.
(a) Central Bank
(b) Commercial Bank
(c) Both (a) and (b)
(d) Government
Anurag Pathak Changed status to publish
Ans – (c)
Explanation:-
Central Bank and Commercial Bank are the two main sources of money supply in an economy.
Central Bank issues currency in the form of paper and coins.
It becomes part of the money supply as currency held by the public.
Commercial banks create demand deposits for the public, which also act as money.
Thus money has two components:
(i) Currency held with the public
(ii) Demand deposits of the public with commercial banks
Anurag Pathak Changed status to publish
