The correct answer is 1 & 2. Measures of Monetary and Liquidity Aggregates:M1 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBIM2 = M1 + Savings deposits of post office savings banksBroad Money (M3)M3 = M1 + Time deposits with the banking systemM4 = M3 + All deposits with post office savings banks (excluding National Savings Certificates). Additional InformationThe measures of money supply in India are classified into four categories M1, M2, M3, and M4 along with M0. This classification was introduced in April 1977 by the Reserve Bank of India. Reserve Money (M0): It is also known as High-Powered Money, monetary base, base money, etc. M0 = Currency in Circulation + Bankers Deposits with RBI + Other deposits with RBI. It is the monetary base of the economy. Download Solution PDFShare on Whatsapp