BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which among the following are known as Narrow Money?

A
B
C
D

Explanation:

Detailed explanation-1: -Therefore, M1 is also called narrow money.

Detailed explanation-2: -Narrow Money (M1): M1 equals money in circulation plus demand deposits in the banking system (current and savings accounts) plus additional deposits with the Reserve Bank of India (RBI). Narrow Money (M2): Post Office Savings, Bank Savings Deposits added to M1 equals M2.

Detailed explanation-3: -Narrow money is also known as M1 and M2. Broad money means M3 and M4. The liquidity of these grades is decreasing. M1 is the most liquid and makes transactions the easiest, while M4 is the least liquid.

Detailed explanation-4: -M1 includes currency i.e. banknotes and coins, plus overnight deposits.

Detailed explanation-5: -Money is measured with several definitions: M1 includes currency and money in checking accounts (demand deposits). Traveler’s checks are also a component of M1, but are declining in use. M2 includes all of M1, plus savings deposits, time deposits like certificates of deposit, and money market funds.

There is 1 question to complete.