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Question

Money supply refers to ______________________.
  1. Total volume of money held by public at a particular point of time
  2. Total volume of money held by public over a period of time
  3. Total volume of money held by the government
  4. Both (a) and (b)

A
Total volume of money held by the government
B
Total volume of money held by public over a period of time
C
Total volume of money held by public at a particular point of time
D
Both (a) and (b)
Solution
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Money supply is the total volume of money in circulation between the public over a period of time. Apart from currency notes and coins, the balance in savings, or current account deposits, held by the public in commercial banks is also considered money.

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