Explain Measures of Money supply in India.
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Explain Measures of Money supply in India.
Measures of Money Supply in India
M1 (Narrow Money): Includes currency with the public, demand deposits with the banking system, and other deposits with the RBI.
M2: M1 plus savings deposits with post office savings banks.
M3 (Broad Money): M1 plus time deposits with the banking system. It is the most commonly used indicator of money supply.
M4: M3 plus all deposits with post office savings banks.