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What is high powered money?...

What is high powered money?

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It is money created or produced by the RBI .It includes currency(noted and coins) held by the public , cash reserves with commerical banks and deposits held by the government and commerical banks with RBI .It is called high powered money because RBI acquires assets against these liabilities
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Knowledge Check

  • An increase in foreign exchange assets of Reserves Bank of India will mean ____ (A) Fall in M_(1) (B) Increase in interest rate (C ) Increase in high powered money

    A
    Only C
    B
    A and C
    C
    Only B
    D
    Only A

  • An increase in foreign exchange assets of Reserves Bank of India will mean ____ (A) Fall in M_(1) (B) Increase in interest rate (C ) Increase in high powered money

    A
    Only C
    B
    A and C
    C
    Only B
    D
    Only A

  • What does Lencho need money for?

    A
    To sow seeds
    B
    To celebrate good harvest
    C
    To feed his family
    D
    both option A and C

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