Question

In an economy, the currency held by the public, Net Demand Deposits with Commercial Banks and Net Time Deposits with Commercial Banks stand at ₹ 1,42,000 crore, ₹ 22,000 crore and ₹ 86,000 crore respectively. The value of Money Supply (M1) would be ₹ _______ crore.

• A. 2,50,000
• B. 86,000
• C. 1,64,000
• D. 1,42,000

Hint:

Money Supply (M1) includes currency held by the public, demand deposits, and other liquid assets. It represents the most liquid forms of money in an economy.

Answer 1

The Correct Option is C

Step 1: Understanding Money Supply (M1).
Money Supply (M1) is the sum of currency held by the public, demand deposits with commercial banks, and other liquid assets in the economy.
Step 2: Calculation of Money Supply (M1).
M1 = Currency held by the public + Net Demand Deposits + Net Time Deposits
M1 = ₹ 1,42,000 crore + ₹ 22,000 crore + ₹ 86,000 crore = ₹ 1,64,000 crore.
Step 3: Conclusion.
Therefore, the value of Money Supply (M1) is ₹ 1,64,000 crore. Final Answer:} ₹ 1,64,000 crore.