Money Supply
Objectives :-) Explain what money is Know the functions of money state the various forms of money Understand different instruments of present day banking. Explain how banks create credit. Explain the components of money supply Explain how money supply affects the economy. Know the need for regulating money supply. Explain how the Reserve Bank Of India regulates money supply. What you have learnt Money is wanted because it gives power to purchase goods and services. Money is anything that is acceptable to all as a medium of exchange, as a standard for deferred payments and as a store of value. Money can be in various forms such as notes and coins, bank cheques, demand drafts, pay orders, bill-of-exchange or electronic cash. Banks create credit by converting deposits into loans. They do this on the principle that not all the people will need all the money at the same time. They maintain some amount of deposits as reservce...
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