CA Foundation · Business Economics · Money Market
In an economy, currency with the public is ₹4,000 crore, demand deposits with banks are ₹6,000 crore, other deposits with RBI are ₹500 crore, and time deposits with banks are ₹9,000 crore. Using the RBI classification, what is M3?
M3 is ₹19,500 crore. First M1 = 4,000 + 6,000 + 500 = ₹10,500 crore, then adding time deposits of ₹9,000 crore gives 19,500. Leaving out the RBI's other deposits would wrongly give ₹19,000 crore.
- A₹10,500 crore
- B₹19,000 crore
- C₹19,500 croreCorrect
- D₹15,500 crore
Explanation
M1 = 4,000 + 6,000 + 500 = ₹10,500 crore. M3 = M1 + time deposits = 10,500 + 9,000 = ₹19,500 crore. Option ₹19,000 crore wrongly omits other deposits with RBI, and ₹10,500 crore is just M1.
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