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1) In which year does Reserve Bank of India introduced the concept of classification of money into M1, M2, M3 and so on?
A)1956
b)1961
c)1977
d)1998

2)Which one out of the following is also known as Reserve Money or High-Powered money or base money?
a)M0
b)M1
c)M2
d)M3

3)Which out of the following is the correct formula for calculating the Reserve money M0?
a)Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
b)Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI
c)M1 + Time deposits with the banking system
d)M1 + Savings deposits of post office savings banks

4)Which out of the following is the correct formula for calculating the Narrow money M1?
a)Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
b)Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI
c)M1 + Time deposits with the banking system
d)M1 + Savings deposits of post office savings banks

5)Which out of the following is the correct formula for calculating the Narrow money M2?
a)Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
b)M3 + All deposits with post office savings banks
c)M1 + Time deposits with the banking system
d)M1 + Savings deposits of post office savings banks

6)Which out of the following is the correct formula for calculating the Broad money M3?
a)Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
b)M3 + All deposits with post office savings banks
c)M1 + Time deposits with the banking system
d)M1 + Savings deposits of post office savings banks

7)Which among the following is/are known as Narrow Money?
a) M1
b) M2
c) M3
d) M4
Select the correct answer from following options:
a)Only a and b
b)Only b and c
c)Only c and d
d)All are correct

8)Which among the following is/are known as Broad Money?
a) M1
b) M2
c) M3
d) M4
Select the correct answer from following options:
a)Only a and b
b)Only b and c
c)Only c and d
d)All are correct

9)Which one out of the following is most liquid among the measures of money supply?
a)M1
b)M2
c)M3
d)M4

10)Which one out of the following is least liquid among the measures of money supply?
a)M1
b)M2
c)M3
d)M4

 

ANSWER:-

1)c)1977
2)a)M0
3)b)Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI
4)a)Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
5)d)M1 + Savings deposits of post office savings banks
6)c)M1 + Time deposits with the banking system
7)a)Only a and b
8)c)Only c and d
9)a)M1
10)d)M4

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