Which of the following statement is false? (a) Money supply is a stock concept
Which of the following statement is false?
(a) Money supply is a stock concept
(b) High-powered money includes demand deposits of commercial banks, besides currency with the public
(c) M1 includes net demand deposits
(d) None of these
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Ans – (b)
Explanation:-
High-powered money consists of two components:
1. Currency with the public
2. Cash reserves with the banks
It does not includes demand deposits of commercial banks.
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