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JAMB Economics 1992 Question 36

Question 36

Money and Inflation

The total amount of money in circulation includes cash

  1. A.and current account balances owned by the non-bank public
  2. B.owned by banks and the non-bank public
  3. C.and current account balances owned by banks and the non-bank public
  4. D.owned by banks, the government and the non-bank public
Show the answer and explanation

Answer: A (and current account balances owned by the non-bank public)

Explanation

Money supply counts currency and current (demand) deposits held by the non-bank public; cash held by banks is not in circulation.