Q5 D of 25 Page 131

Answer in detail

What are the divisions of money supply?


The money supply is the total stockpile of cash and other deposits in the country, which includes currency held by the public, bank, post office, government and other financial institutions.


Money is divided into 4 categories, M1 to M4, M0 is same as M1


M0 or M1 – I it includes cash hold by the public, demand deposits held by banks and demand deposit held by RBI. It constitutes the majority of money available in the country. It is called a narrow money and can be easily converted.


M2: M1 + Short time deposit of banks and other money market institute.


M3: M2 + Long term deposit


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5

Answer in detail

Explain in detail about the role of RBI in the country.


 5

Answer in detail

Write in detail about the various functions of money.


 6

Write the correct statement.

1. The barter system flourished wherever civilizations thrived.


2. This was the initial form of trade.


I) 1 is correct; 2 is wrong


ii) Both 1 and 2 are correct


iii) Both 1 and 2 are wrong


iv) 1 is wrong; 2 is correct


 6

Write the correct statement.

1. Most of the international trade transactions are carried out in US dollars.


2. No other country except the US carries out trade in the world.


I) both the statements are correct.


ii) Both the statements are wrong.


iii) 1 is correct; 2 is wrong


iv) 1 is wrong; 2 is correct