supply of money is not simply the supply of notes and coins in economy.do you agree with this statement ?give reason with support of your answer?
Mohanish,
Yes, I agree with the statement that supply of money is not simply the supply of notes and coins in economy. Supply of money has two components: currency component and deposit component. Currency component comprises of the currency notes and coins issued by the Monetary Authority of a country, whereas, deposit component comprises of the savings or the current account deposits held by the public in various commercial banks of the country.
Yes, I agree with the statement that supply of money is not simply the supply of notes and coins in economy. Supply of money has two components: currency component and deposit component. Currency component comprises of the currency notes and coins issued by the Monetary Authority of a country, whereas, deposit component comprises of the savings or the current account deposits held by the public in various commercial banks of the country.