Economics • Banking & FinanceMedium
Which of the following is NOT a component of Broad Money (M₃) in India as per RBI definitions?
A. Currency with the public
B. Demand deposits with banks
C. Time deposits with banks
D. Post office savings bank total deposits✓ Correct Answer
💡 Solution & Explanation
According to the Reserve Bank of India monetary aggregates, broad money or M3 comprises currency with the public, demand deposits with banking institutions, and time deposits with banking institutions. Post office savings bank total deposits are classified separately under narrower monetary aggregates rather than M3. Candidates should memorize the components of M1, M2, M3, and M4 as defined by the RBI Working Group for economy tests.
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