{"id":90305,"date":"2025-06-01T10:25:00","date_gmt":"2025-06-01T10:25:00","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=90305"},"modified":"2025-06-01T10:25:00","modified_gmt":"2025-06-01T10:25:00","slug":"the-reserve-bank-of-india-defines-narrow-money-as","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-reserve-bank-of-india-defines-narrow-money-as\/","title":{"rendered":"The Reserve Bank of India defines narrow money as"},"content":{"rendered":"

The Reserve Bank of India defines narrow money as<\/p>\n

[amp_mcq option1=”CU (currency notes + coins) + DD (net demand deposits held by commercial banks)” option2=”CU + DD + saving deposits with post office savings banks” option3=”CU + DD + net time deposits of commercial banks” option4=”CU + DD + net time deposits of commercial banks + total deposits of post offices” correct=”option1″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CAPF – 2018<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe correct answer is A) CU (currency notes + coins) + DD (net demand deposits held by commercial banks).
\n<\/section>\n
\nAs per the Reserve Bank of India’s classification (both historical and current definition of M1, with slight variations in scope of ‘Other Deposits’), narrow money (M1) primarily consists of currency with the public and demand deposits with the banking system. Option A accurately reflects these main components: CU (Currency with Public) and DD (Demand Deposits with commercial banks). “Net” demand deposits exclude inter-bank deposits which is appropriate.
\n<\/section>\n
\nRBI uses four measures of money supply: M1, M2, M3, and M4.
\nM1 = Currency with the Public + Demand deposits with the Banking System + ‘Other’ Deposits with RBI.
\nM2 = M1 + Savings deposits of post office savings banks.
\nM3 = M1 + Net time deposits of commercial banks. (This is Broad Money)
\nM4 = M3 + All deposits with post office savings banks (excluding National Savings Certificates).
\nOption A aligns with the core components of M1.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank of India defines narrow money as [amp_mcq option1=”CU (currency notes + coins) + DD (net demand deposits held by commercial banks)” option2=”CU + DD + saving deposits with post office savings banks” option3=”CU + DD + net time deposits of commercial banks” option4=”CU + DD + net time deposits of commercial banks … <\/p>\n

Detailed SolutionThe Reserve Bank of India defines narrow money as<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1114,1120,1190],"class_list":["post-90305","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1114","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"\nThe Reserve Bank of India defines narrow money as<\/title>\n<meta name=\"description\" content=\"The correct answer is A) CU (currency notes + coins) + DD (net demand deposits held by commercial banks). As per the Reserve Bank of India's classification (both historical and current definition of M1, with slight variations in scope of 'Other Deposits'), narrow money (M1) primarily consists of currency with the public and demand deposits with the banking system. Option A accurately reflects these main components: CU (Currency with Public) and DD (Demand Deposits with commercial banks). "Net" demand deposits exclude inter-bank deposits which is appropriate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-reserve-bank-of-india-defines-narrow-money-as\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Reserve Bank of India defines narrow money as\" \/>\n<meta property=\"og:description\" content=\"The correct answer is A) CU (currency notes + coins) + DD (net demand deposits held by commercial banks). As per the Reserve Bank of India's classification (both historical and current definition of M1, with slight variations in scope of 'Other Deposits'), narrow money (M1) primarily consists of currency with the public and demand deposits with the banking system. Option A accurately reflects these main components: CU (Currency with Public) and DD (Demand Deposits with commercial banks). "Net" demand deposits exclude inter-bank deposits which is appropriate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/the-reserve-bank-of-india-defines-narrow-money-as\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:25:00+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The Reserve Bank of India defines narrow money as","description":"The correct answer is A) CU (currency notes + coins) + DD (net demand deposits held by commercial banks). 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