Mains Paper II · 1 Indian Economy · 1.6 Money and monetary policy

1.6.1 Money: functions, legal tender and money supply measures (M0–M4, money multiplier)

Money is anything widely accepted in exchange; India measures it in layers from M0 (the base RBI controls) to M3 and M4 (the broad stock), and banks multiply the base into the wider money supply.

  • APPSC Group 2 · Mains Paper II
  • Advanced level
  • 7 min read
  • Full course

Key terms

  • functions of money
  • legal tender
  • fiat money
  • M0
  • M1
  • M3
  • high-powered money
  • money multiplier
  • seigniorage
  • demand for money

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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