Macro

Money & Banking

Medium

M3 is the most commonly used measure of money supply. It is also known as aggregate monetary resources. Which of the following is not a component of M3?

Currency held by public.

Demand deposits by people with commercial banks.

Savings deposits with Post Office savings banks.

Net time deposits of commercial banks.

✅ Correct Option: 3

Option 1 -> Currency held by public is part of M1, which is included in M3.

Option 2 -> Demand deposits with commercial banks are part of M1, which is included in M3.

Option 3 -> Savings deposits with Post Office savings banks are part of M2, not M3.

Option 4 -> Net time deposits of commercial banks are what distinguish M3 from M1.

Hence, Option 3: Savings deposits with Post Office savings banks -> M3 is defined as M1 (currency with public + demand deposits + other deposits with RBI) plus net time deposits with commercial banks. Savings deposits with Post Office savings banks are actually a component of M2, not M3. M3 focuses on commercial banking system deposits, while postal savings are excluded from this broader monetary aggregate. This distinction is important as M3 represents the aggregate monetary resources in the economy through the commercial banking channel. -> correct

2026: 21 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Lender of last resort	(I) 1/Cash reserve ratio
(B) Money multiplier	(II) Buying and selling government securities
(C) Open market operations	(III) RBI
(D) $M^d_t$ = kPY	(IV) Transaction demand for money is positively related to the real income of an economy.

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Arrange the following in chronological order.

(A) Barter System

(B) Currency notes

(D) Online transfer of money.

Choose the correct answer from the options given below:

(A), (B), (C), (D)
(A), (C), (B), (D)
(B), (A), (D), (C)
(C), (B), (D), (A)

2023: 30 May Shift 1

"The ratio of total money supply to the stock of high powered money in an economy" is referred to :

2022: 10 Aug Shift 2

Identify the correct statements regarding money supply

(A) Money supply is a stock concept.

(B) Money supply is a flow concept.

(D) Money supply is the currency held with banks.

(E) Money supply is the concept of real flow.

Choose the correct answer from the options given below :

2025: 16 May Shift 1

Currency of which denomination were newly launched during demonetization?

2025: 14 May Shift 1

Reserve Bank of India (RBI) is also known as by which other name.

M3 is the most commonly used measure of money supply. It is also known as aggregate monetary resources. Which of the following is not a component of M3?

Solution

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