High-powered money includes only the cash reserves of commercial banks

506 viewsDecember 15, 2023Money and Banking True or False

Anurag Pathak28.35K December 15, 2023 0 Comments

True or False with Reasons

High-powered money includes only the cash reserves of commercial banks.

Anurag Pathak Changed status to publish December 15, 2023

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Anurag Pathak28.35K Posted December 15, 2023 0 Comments

False,

In addition to cash reserves of commercial banks, high-powered money also includes currency held by the public.

What is high-powered money?

High Powered Money is money produced by the RBI and the government.

It consists of two components:

1. Currency held by the public
2. Cash reserves with the banks

Anurag Pathak Changed status to publish December 15, 2023

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High-powered money includes only the cash reserves of commercial banks

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Anurag Pathak

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