1.

What is meant by high powered money?

Answer»

High powered money: It refers to the money produced by RBI and Government of India. The total liability of monetary authority of the Country and RBI is called High Powered Money (H) or monetary base. It consists of (a) currency (notes and coins) in the hands of the public (C), (b) Cash reserves of commercial bank (R), (c) Other deposits of RBI (OD).

Symbolically: H = C + R + OD



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