What is High Powered Money?
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Solution and Explanation
Step 1: Understanding High Powered Money.
High Powered Money, also known as Base Money or Reserve Money, refers to the total currency in circulation in the economy, including the currency held by the public and the reserves held by commercial banks with the central bank. It is the money that the central bank uses to control money supply in the economy.
Step 2: Conclusion.
Thus, High Powered Money forms the foundation of the monetary base in an economy, which is used by commercial banks to create credit.
Top Questions on Money and Banking
- Suppose in an economy, primary deposits are ₹ 500, if the Reserve Ratio is 25\%. Estimate the total deposits created and the total lending by the banking system.
- CBSE CLASS XII - 2025
- Economics
- Money and Banking
Arrange the following components of monetary aggregates in descending order as per their liquidity:
(A) currency notes
(B) demand deposits
(C) time deposits
(D) money market mutual fund
Choose the correct answer from the options given below:
- CUET (PG) - 2025
- Economics
- Money and Banking
In the Keynesian framework, determination of an equilibrium interest rate also implies
(A) The rate that equates the supply of and the demand for bonds.
(B) The rate that equates the supply of money with the demand for money.
(C) The rate that equates the supply of money and demand for investment.
(D) The rate that equates supply of labour and demand for labour.
Choose the correct answer from the options given below:
- CUET (PG) - 2025
- Economics
- Money and Banking
- Match List-I with List-II \[\begin{array}{|c|c|} \hline \textbf{Measures of Money Supply} & \textbf{Components} \\ \hline \text{(A) M3} & \text{(I) Currency held by the public (C) + net demand deposits of banks (DD) + other deposits of the RBI (OD)} \\ \hline \text{(B) M2} & \text{(II) C + DD + OD + net time deposits of banks} \\ \hline \text{(C) M1} & \text{(III) C + DD + OD + saving deposits with post office saving banks} \\ \hline \text{(D) M4} & \text{(IV) C + DD + OD + net time deposits of banks + total deposits with post office savings organization (excluding National Saving Certificates)} \\ \hline \end{array}\] Choose the correct answer from the options given below:
- CUET (PG) - 2025
- Economics
- Money and Banking
- Which of the following statements are correct about the money multiplier? (A) It is the ratio of the stock of money to the stock of high powered money.
(B) It is always smaller than one.
(C) Its value depends on the reserve ratio and currency-deposit ratio.
(D) It is inversely related to the reserve ratio.
Choose the correct answer from the options given below:- CUET (PG) - 2025
- Economics
- Money and Banking
Questions Asked in MPBSE Class XII Board exam
निम्नलिखित में से किसी एक विषय पर निबंध लिखिए:
(i) पर्यावरण की सुरक्षा
(ii) दुखों की उपयोगिता
(iii) विद्यार्थी और अनुशासन
(iv) राष्ट्रीय एकता और अखंडता
(v) इंटरनेट का दैनिक जीवन में अनुपयोगपरीक्षा की तैयारी की जानकारी देते हुए पिता को पत्र लिखिए।
द्वनि विस्तारक यंत्रों पर प्रतिबंध लगाने हेतु जिला सचिव महोदय को प्रार्थना पत्र लिखिए।
निम्नलिखित गद्यांश की संदर्भ-प्रसंग सहित व्याख्या कीजिए: गद्यांश: पैसा पावर है। पर उसके स्वभाव में आस-पास सालों तक जमा न जमा हो तो क्या वह ताकत पावर है! पैसे को देखने के लिए बैंक-हिसाब सीट, पर माल-असबाब, मकान-कोठी तो अनदेखे भी दीखते हैं। पैसे के उस 'पेसींग पावर' के प्रयोग में ही पावर का खेल है।
निम्नलिखित गद्यांश की संदर्भ-प्रसंग सहित व्याख्या कीजिए: गद्यांश: एक बार वह 'डांग' देखने श्यामनगर शेला गया। पहलवानों की कुस्ती और डांव-पेच देखकर उससे नहीं रहा गया। जवानी की मस्ती और होल की ललकारती हुई आवाज़ ने उसकी नसों में बिजली उत्पन्न कर दी। उसने बिना कुछ सोचे-समझे दंगल में 'शेर के बच्चों' को चुनौति दे दी।