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Only Net (gross/net) demand deposits are part of Money Supply. Demand deposits with commercial banks consist of: 1. Demand deposits by the public 2. Inter-banks deposits Only Demand deposits by the public are included in the money supply. The demand…

Bank money refers to the demand deposits created by the Commercial Banks. Explanation:- Demand deposits refer to deposits created by commercial banks. These are the deposits from where the money can be withdrawn on demand. The bank issues the cheques…

Double coincidence of wants refers to the simultaneous fulfillment of mutual wants of buyers and sellers. Explanation:- Double coincidence of wants refers to the mutual wants of buyers and sellers at the same time. For example:- A wants to sell…

Money Supply refers to total volume of money held by public at a particular point of time in an economy. Explanation:- Money supply refers to money held by public at a particular point of time It has two components: 1.…

Barter Exchange refers to exchange of goods for goods. Explanation:- In the beginning of civilization, human needs were simple and limited. People used to exchange goods with each other to satisfy their wants. Barter Exchange refers to the exchange of…

Two components of money supply are Currency with public and Demand deposits held by commercial banks. Explanation:- Money Supply has two components: Current with public Demand deposits of public with commercial banks

Money supply is a stock concept as it is concerned with a particular point of time. Explanation:- The economic variables that are measured at a point of time are called stock variables. Money supply is measured at a particular point…

Ans: (i) – e Barter Exchange is the exchange of goods for goods (ii) – d M1 = Currency and coins with Public + Demand Deposits of Commercial Banks + Other Deposits with RBI (iii) – b The currency and…

Ans: (i) – (b) (ii) – (c) Explanation:- M2 = M1 + Savings deposits with post office saving bank M3 = M1 + Net Time Deposits with Banks

Ans – (i) – (a) (ii) – (b) Explanation:- Measure of value:- Under the Barter system, different goods were at different values and there was no common denomination to express their exchange ratios. But, money is the measuring rod that…