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Monday, March 30, 2015

MONEY MEASUREMENT



M0-    CURRENCY IN CIRCULATION+CRR+SLR(CASH PORTION)
           HIGH POWER MONEY


M1-    M0+DEMAND DEPOSIT(CASA)



M2-    M1+POSTAL SAVING DEPOSIT




M3-    M2- POSTAL DEPOSIT+TIME DEPOSIT  




M4-   M3+POSTAL ALL DEPOSIT



THIS IS THE PROCESS THROUGH WHICH RBI CHECK THE LIQUIDITY(AVAILABILITY OF CASH) IN THE MARKET OR ECONOMY.IN OUR COUNTRY LOT OF PEOPLE LIVING BELOW  POVERTY LINE.SO IT IS IMPORTANT FOR RBI TO CONTINUOUSLY MONITOR THE INFLATION AND LIQUIDITY FOR THE BASIC NEEDS OF COMMON PEOPLE.EXCESS FUND IS THE  INFLATION CREATOR.SO PROPER MONEY SUPPLY MAKE ECONOMY HEALTHY.

2 comments:

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