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Ans – (c) Explanation:- Statement 1 is true Money supply includes money held by the public that can easily be disposed of in the settlement of liabilities and obligations. The public includes individuals and business firms that are money-using sector.…

Ans – (d) Explanation:- Assertion (A) is false Bank money is not a legal tender money. It is an optional money as it can be refused in settlement of any financial obligation and liabilities. It depends on the acceptor whether…

Ans – (d) Explanation:- Assertion (A) is false Notes and Coins are not the only sources of money supply in the economy. Demand deposits of the public with the commercial bank is also part of the money supply. Money Supply…

Ans – (a) Explanation:- Bank money is a non-legal tender money. As bank money such as cheques, demand drafts can be refused by any citizen of the country for settlement of a financial transaction. Any citizen is not obliged to…

Ans – (b) Explanation:- Assertion (A) is true Demand deposits are non-legal tender money or optional money as the acceptor can refuse to accept the payment in the form of cheque and demand draft. Reason (R) is also true The…

Ans – (a) Explanation:- No one can refuse to accept payment made in currency notes as these are the unlimited legal tender in India. the currency can be used to meet any liabilities and obligations.

Ans – (d) Explanation:- Demand deposits are the part of the money supply as these are treated as equal to currency held as they are readily accepted as means of payment. Thus Assertion (A) is false and Reason (R) is…

Ans – (b) Explanation:- Assertion (A) is true, currency held with the government and banks is not included in the money supply. Money Supply includes Currency and coins held with public demand deposits  of the public with banks Reason (R)…

Ans – (a) Explanation:- These refer to those functions of money which are supplementary to the primary functions. These functions are derived from primary functions and, therefore, they are also known as ‘Derivative Functions’. The Major Secondary functions are: Standard…

Ans – (a) Explanation:- Money supply refers to the total volume of money held by the public at a particular point of time in an economy. There are two components of the money supply. Money Supply = Current with Public…