12 Questions
What can deficit financing help developing economies with?
Making up the deficiency of resources
How does an increase in money supply impact economic growth according to the text?
Can accelerate economic growth within proper limits
Why is it important to manage money supply according to the text?
To prevent runaway inflation
What does the term 'money supply' refer to?
Total stock of monetary media of exchange available to a society
Why are the cash reserves held by the Government and banks excluded from the standard measures of money supply?
They are used for transaction and speculative purposes
What is the rationale behind considering money supply as held by the public?
To separate producers of money from users of money
What is the primary role of money supply in an economy according to the passage?
To determine the price level and interest rate
What are the main factors that determine the money supply in an economy?
The public, commercial banks, Central Bank, and Government
What are the various measures of money supply discussed in the passage?
The passage does not discuss the various measures of money supply
Why is the growth of money supply important according to the passage?
Both (a) and (b)
What is the objective that requires controlled expansion of money supply according to the passage?
Development with stability
What type of inflation is mentioned in the passage as potentially stimulating investment?
Mild inflation arising from deficit financing
Explore the factors that determine the money supply in an economy, including the roles of the Central Bank, Government, public, and commercial banks. Understand how these entities influence the money circulating in an economy.
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