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Money and Banking — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsMoney and Banking3 Marks
Question
State the meaning and components of money supply.
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Answer

Money supply is the stock of money on a specific day. It consists of:
  1. Currency which includes coins and currency notes. Currency is also called fiat money which is money which under law, must be accepted for all debts. Money supply includes only that currency which is held outside banks i.e. currency held only by the public.
  2. Demand deposits which are chequable deposits.

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