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Questions › UGC-NET › UGC-NET 2025 › Q27
2 marksMacroeconomics › Money supply and the banking multiplier › The monetary base and the money multiplierHardabout 2 min

UGC-NET 2025 Question 27: Money supply and the banking multiplier

Consider the following statements:

A. Reserve Money = C + OD + CR
B. M1 = C + OD
C. Money Multiplier (m) = M / RM
D. Narrow Money Supply = M3

(Here C = Currency, OD = Other deposits with RBI, CR = Cash Reserve of Banks, M = Money Supply, RM = Reserve Money)

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Money supply and the banking multiplier has come up 74 times in 7 exams since 2005.

What this question tests

This question is on The monetary base and the money multiplier, part of Money supply and the banking multiplier in Macroeconomics.

How the money supply is built from high-powered money, and what sets the multiplier.

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Question from the UGC-NET 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.