Statement 1: Inter-bank deposits do not form part of money supply, as they do not belong to public
Statement 1: Inter-bank deposits do not form part of money supply, as they do not belong to public.
Statement 2: Term Deposits are also included while calculating M1 measurement of money supply.
Alternatives:
(a) Both the statements are true
(b) Both the Statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Anurag Pathak Changed status to publish December 15, 2023
Ans – (c)
Explanation:-
Statement 1 is true
Only demand deposits by the public are included in the money supply.
Statement 2 is false
Only demand deposits by the public are included in the money supply as these are readily available for payment.
Term deposits are not readily available for payment, and thus are included in the money supply.
Anurag Pathak Changed status to publish December 15, 2023
