0 ShivangIntermediate Asked: November 30, 20212021-11-30T22:14:45+05:30 2021-11-30T22:14:45+05:30In: FM (CA Inter) Concept of money supply 0 Please explain Share Sorry, you do not have permission to answer to this question. 3 Answers Oldest Yashjeet Singh The Official Nerd 2021-12-01T12:10:26+05:30Added an answer on December 1, 2021 at 12:10 pm Yeh question yeh kahna chah raha hai ki aise kaun se tark hai jinki wajah se money supply me net demand deposits of bank ko include karte hai. Tark ka matlab appropriateness, advisability Shivang Intermediate 2021-12-01T21:08:15+05:30Replied to answer on December 1, 2021 at 9:08 pm This answer was edited. Answer kya hoga iska Yashjeet Singh The Official Nerd 2021-12-03T19:04:55+05:30Added an answer on December 3, 2021 at 7:04 pm The RBI regards these four measures of money stock as representing different degrees of liquidity. It has specified them in the descending order of liquidity, M1 being the most liquid and M4the least liquid of the four measures. We shall briefly discuss the important components of each. • Currency consists of paper currency as well as coins. • Demand deposits comprise the current-account deposits and the demand deposit portion of savings deposits, all held by the public. These are also called CASA deposits and these are cheapest sources of finance for a commercial bank. • It should be noted that it is the net demand deposits of banks, and not their total demand deposits that get included in the measure of money supply. The total deposits include both deposits from the public as well as inter-bank deposits. Money is deemed as something held by the ‘public’. Since inter-bank deposits are not held by the public, they are netted out of the total demand deposits to arrive at net demand deposits. • ‘Other deposits’ with the RBI are its deposits other than those held by the government (the Central and state governments), and include demand deposits of quasi-government institutions, other financial institutions, balances in the accounts of foreign central banks and governments, and accounts of international agencies such as IMF and the World Bank.
Yeh question yeh kahna chah raha hai ki aise kaun se tark hai jinki wajah se money supply me net demand deposits of bank ko include karte hai.
Tark ka matlab appropriateness, advisability
The RBI regards these four measures of money stock as representing different
degrees of liquidity. It has specified them in the descending order of liquidity, M1
being the most liquid and M4the least liquid of the four measures.
We shall briefly discuss the important components of each.
• Currency consists of paper currency as well as coins.
• Demand deposits comprise the current-account deposits and the demand
deposit portion of savings deposits, all held by the public. These are also
called CASA deposits and these are cheapest sources of finance for a
commercial bank.
• It should be noted that it is the net demand deposits of banks, and not
their total demand deposits that get included in the measure of money
supply. The total deposits include both deposits from the public as well as
inter-bank deposits. Money is deemed as something held by the ‘public’.
Since inter-bank deposits are not held by the public, they are netted out of
the total demand deposits to arrive at net demand deposits.
• ‘Other deposits’ with the RBI are its deposits other than those held by the
government (the Central and state governments), and include demand
deposits of quasi-government institutions, other financial institutions,
balances in the accounts of foreign central banks and governments, and
accounts of international agencies such as IMF and the World Bank.