Q. Which of the following is/are part of “Reserve Money (RM)”?
1.RBI’s net credit to the Government
2.RBI’s net credit to the Banks
3.Net forex reserve with the RBI
Choose the correct answer from below given codes:

[A] 1 only

[B] 1 and 2 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: D

Explanation: The gross amount of the following six segments of money at any point of time is known as Reserve Money (RM) for the economy or the government:

  1. RBI’s net credit to the Government;
  2. RBI’s net credit to the Banks;
  3. RBI’s net credit to the commercial banks;
  4. net forex reserve with the RBI;
  5. government’s currency liabilities to the public;
  6. net non-monetary liabilities of the RBI.

Source: Ramesh Singh