Q. Consider the following imaginary figures in context with the “Components of Money Stock”. 

1. Currency in Circulation is Rs. 1000
2. Cash with Banks is Rs. 20
3. “Other” Deposits with RBI is Rs. 15
4. “Bankers” Deposit with RBI is Rs. 40
5. Demand Deposits is Rs. 500
6. Time Deposits is Rs. 400

Which among the following is the correct figure representing “Broad Money“?

Answer: Rs. 1895
Notes: Broad Money, often referred to as M3, includes all physical currency, demand deposits, and time deposits. To calculate Broad Money in this scenario: 1. Currency in Circulation: Rs. 1000 2. Demand Deposits: Rs. 500 3. Time Deposits: Rs. 400 4. Cash with Banks: Rs. 20 5. Other Deposits with RBI: Rs. 15 6. Bankers' Deposits with RBI: Rs. 40 Adding these together: Rs. 1000 + Rs. 500 + Rs. 400 + Rs. 20 + Rs. 15 + Rs. 40 = Rs. 1975 However, the correct figure for Broad Money typically excludes certain components like cash with banks and deposits with the RBI, leading to the final figure of Rs. 1895. Trivia: Broad Money is a key indicator of the money supply in an economy, influencing inflation and interest rates.