7. Money supply is a concept a) Stock b) Flow c) Both a and b d) Neither a or b 8. Who regulates money supply a) Government of India b) Reserve bank of India c) Commercial banks d) Planning Commission

Money supply in India is: a) Currency with public. b) Demand deposits with the bank. c) Currency with public + Demand deposits with banks. d) None of these.

12. Supply of money refers to _____ (Choose the correct alternative). a. currency held by the public b. currency held by Reserve Bank of India (RBI) c. currency held by the public and demand deposits with commercial banks 13. There exists _____ relation between reserve requirements and total deposit created in the economy. a) Direct b) Inverse c) can't say d) none of these 14. When commercial banks fail to meet its financial requirement from all other sources, it approaches central at the last. This makes the central bank as _____. a) Clearing house c) Bank of issue b) custodian of cash reserve d) lender of last report 15. When value of money multiplier is 25 and value of CRR is 1%, the value of SLR is a) 1% b) 2% c) 3% d) 4% 16. Which of the following does not qualify for "banker's bank" function of RBI? a) Keeps the cash reserves of the commercial banks in its custody. b) Managing the public debt. c) Advancing loans to commercial banks. d) Settling interbank claims.

Describe how each of the following can affect the money supply: (a) the central bank; (b)banks; and (c) depositors.

1. Money which is issued by the monetary authority of India is known as _____. A. Legal Reserve Ratio B. Legal tender money C. Legal Reserve Requirement D. None of these

money supply says that it doesnot include the stock of money with commercial banks, however demand deposits are taken into consideration. but this money is also with commercial banks and hence we shouldnot include it