GyanGramQuestion
If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
PRELIMS 2020 · INDIAN ECONOMY
If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, the i…
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• Correct Answer: D
• M1 = Currency in circulation + Demand deposits. Withdrawal merely shifts money from deposits to cash, leaving total M1 unchanged.
• No net change occurs in aggregate money supply.
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