The formula for High-Powered Money (H) is H = C + R, where C is Currency held by the public and R represents the total reserves of commercial banks. R consists of Vault Cash (cash reserves held by banks) and Banker's Deposits with RBI (other deposits with the RBI). Option C correctly includes Currency held by the public and the components of bank reserves (Cash reserves of commercial banks + Other deposits with the RBI).
Which of the following are used for measuring of the high-power money supply (H) by RBI in India ?
Asked in APPSC Group II Mains paper 2 2025 · Topic: Money & Banking (Money: Functions, Forms, and Measures of Money Supply)
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Answer: C. Currency held by the public + Cash reserves of the commercial banks + Other deposits with the RBI
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