MEASURES OF MONEY SUPPLY

December 2019, Paper-II
Question
The elements given below are some of the parts of the M4 money supply of Indian economy
1. Broad money (M3)
2. All deposits with the post office savings bank
3. National savings certificate Choose the correct option which constitutes M4

a) Only (1) and (2)
b) Only (2) and (3)
c) Only (1) and (3)
d) (1), (2) and (3)

Answer A
M4 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI + Time deposits with the banking system+ All deposits with post office savings banks (excluding National Savings Certificates).
Broad Money, M3 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI + Time deposits with the banking system