Question

Match List-I with List-II

Choose the correct answer from the options given below:

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (II), (B) - (I), (C) - (III), (D) - (IV)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Hint:

Remember liquidity order: \(M_1 > M_2 > M_3 > M_4\).
\(M_1\) is the most liquid; \(M_4\) is the least liquid.
\(M_1\) and \(M_2\) are narrow money; \(M_3\) and \(M_4\) are broad money.

Answer 1

The Correct Option is A

Concept:
The Reserve Bank of India publishes four alternative monetary aggregates—\(M_1, M_2, M_3\), and \(M_4\)—ranging in degrees of liquidity from narrow money to broad money.

Step 1: Definitions of the Monetary Aggregates:
- \(M_1\) (Narrow Money): Includes currency notes and coins held by the public (\(CU\)) plus net demand deposits held by commercial banks (\(DD\)). Thus, (A) matches (I).
- \(M_2\): Defined as \(M_1\) plus savings deposits placed with Post Office savings banks. Thus, (B) matches (II).
- \(M_3\) (Broad Money): Defined as \(M_1\) plus net time deposits of commercial banks. Thus, (C) matches (III).
- \(M_4\): Defined as \(M_3\) plus total deposits with Post Office savings organisations, excluding National Savings Certificates (NSC). Thus, (D) matches (IV).

Step 2: Verifying the Matches:
The correct pairwise alignment is: \[ \text{(A)-(I), (B)-(II), (C)-(III), (D)-(IV)} \] Final Answer:
This sequence corresponds directly to option (A).