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MONEY SUPPLY AND INFLATION PART 1
What is money supply in an economy?
Money supply refers to the total stock of money available in an economy at a specific point in time, including currency in circulation and deposits held by the public with banks.
What is the primary source of money creation in a modern economy?
Commercial banks create money through credit expansion process.
What does M0 (Reserve Money) represent in India?
M0, also called Reserve Money or High-Powered Money, consists of currency in circulation plus bankers' deposits with RBI plus other deposits with RBI.
What is the formula for calculating the money multiplier?
Money multiplier equals 1 divided by Cash Reserve Ratio.
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