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SSC CGL 2023 PYQ — Question 27

SSC CGL - 20 July 2023 - Shift 4 • General Awareness • Q27

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What is known as aggregate monetary resources?

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Correct answer: B

Explanation

The correct answer is option 2 i.e. M1+ Net time deposits of commercial banks.

M1 + net time deposits from commercial banks comprise all of the liquid assets in the economy, they are regarded as aggregate monetary resources.

  1. M1 consists of easily tradable demand deposits and cash that is in circulation. By including net time deposits (savings and fixed deposits), more stable but still reasonably liquid financial assets are included in this measurement.
  2. Bonds and other financial assets are not included in M1.
  3. When taken as a whole, these elements show the total amount of money available for investment and consumption, giving an accurate picture of the financial resources in the economy.
  4. Economists and policymakers can better manage economic stability and evaluate liquidity using this aggregate.
  5. The U.S. no longer uses the M1 as a monetary policy guide because there is no longer any association between it and other economic indicators.