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Chapter 3- Various measures on supply of money
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This lesson discusses topics like Demand deposits, Fixed deposits, fiat money etc

Arpita Prakash
NCERTs series initiator at Unacademy 'Educator of the Month' for Feb'19 CBSE 0.1% Merit Certificate holder in Mathematics

Unacademy user
Dear Brother, Please make a course on Mensuration for SSC CGL . Thank you so much in Advance !!!
Thank you mam 1 rupee note is issued by ministry of finance and it bears the signature of finance secretary.
  1. Money is most liquid of all assets- universally acceptable ; can be exchanged for other commodities very easily . Also has an opportunity cost -> interest earned when put in fixed deposits Demand for money balance is often referred to as liquidity preference People desire to hold money balance broadly from 2 motives: o The Transaction Motive- for carrying out transactions o The Speculative Motive-Individual holds wealth in form of landed property, bullion bonds, money etc - Bonds- papers bearing the promise of a future stream of monetary returns over a certain period of time Issued by governments or firms for borrowing money from public - Tradable in market

  2. THE SUPPLY OF MONEY: VARIOUS MEASURES India- Currency notes are issued by RBI (monetary authority in India) . Coins- issued by Gol Another form of money- balance in savings, or current account deposits, held by public in commercial banks o Because cheques drawn on these accounts are used to settle transactions o Demand deposits- payable by bank on demand from account holder o Fixed deposits- have fixed period to maturity time deposits Value of currency notes and coins is derived from the guarantee provided by issuing authority of these items Every currency note bears on its face a promise from RBl Governor . Currency notes and coins- Fiat Money have no intrinsic value like a gold/silver coin o Also called legal tenders - cannot be refused by any citizen of country for settlement of any kind of transaction Demand deposits aren't legal tenders o Cheques drawn on savings/ current accounts can be refused by anyone as a mode of payment