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Question
Ms. lqra Ansari, a teacher, was explaining in her class about various types of deposits with the commercial banks. She quoted that - "These deposits form a part of M1 measure of money supply and are payable on demand by the commercial banks."
Identify the type of deposits she was explaining about and choose the correct alternative:
- Demand Deposits
- Time Deposits
- Post Office Deposits
Options
Only (i)
(i) and (ii)
Only (ii)
(i), (ii) and (iii)
Solution
Only (i)
Explanation:
- M1 contains people's demand deposits or chequable deposits with commercial banks. Currency and other deposits are also included.
- M3 comprises commercial bank time deposits.
- M4 deposits include demand deposits, time deposits, and post office deposits.
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