Question

Identify the it{incorrect feature(s) of the Money Supply in an economy, from the following:}

(i) It is measured during a period of time.
(ii) It includes stock of money held by the government of a nation.
(iii) It always represents the currency held with the Central Bank of the nation.

• A. (i) and (iii)
• B. (ii) and (iii)
• C. (i) and (ii)
• D. (i), (ii), and (iii)

Hint:

Money supply includes currency with the public and demand deposits with banks, excluding money held by the government or Central Bank.

Answer 1

The Correct Option is D

Money supply is a stock concept measured at a specific point in time, not over a period of time, making statement (i) incorrect. 
Statement (ii) is incorrect because the government’s stock of money is not included in money supply. 
Statement (iii) is also incorrect as money supply includes currency held by the public, not with the Central Bank. 

Since all three statements are incorrect, the correct answer is (D) (i), (ii), and (iii).