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The 'high-powered money' (reserve money / monetary base) consists of
AGovernment securities held by the public
BCommercial bank deposits only
CCurrency held by the public + commercial banks' reserves with the RBI
DForeign exchange reserves only
Answer & Solution
Correct answer: C. Currency held by the public + commercial banks' reserves with the RBI
High-powered money = currency held by public + bankers' deposits with the RBI + 'other' deposits with RBI. It is the base on which the broader money supply is built through the money multiplier.
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