\n\n Narrow money<\/strong><\/p>\n<\/td>\n\n Broad money<\/strong><\/p>\n<\/td>\n<\/tr>\n\n(i) It is highly liquid money.<\/td>\n | (i) It includes both full liquid and less liquid money.<\/td>\n<\/tr>\n | \n(ii) It includes coins and currency notes with public, demand deposits with banks and other deposits with RBI.<\/td>\n | (ii) It includes money held in the form of savings, net time deposits, currency and demand deposits.<\/td>\n<\/tr>\n | \n(iii) It is represented as MN<\/sub>=C+DD+OD<\/td>\n(iii) It is represented as MB<\/sub> = C+DD+SD+TD<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Question 3. \nDistinguish between Primary deposits and Derivative deposits. \nAnswer:<\/p>\n \n\n\n\n Primary Deposits<\/strong><\/p>\n<\/td>\n\n Derivative Deposits<\/strong><\/p>\n<\/td>\n<\/tr>\n\n(i) It is created when customers deposit their money in the bank by opening new accounts.<\/td>\n | (i) It arises when customers are granted loans and advances by a bank.<\/td>\n<\/tr>\n | \n(ii) It does not create any kind of credit creation.<\/td>\n | (ii) It contributes directly towards credit creation activity of commercial banks<\/td>\n<\/tr>\n | \n(iii) Whenever customer makes payment to the banks, primary deposits are created<\/td>\n | (iii) Whenever the loan is granted, derivate deposit is created.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Question 4. \nMention the motives of demand for money as per J.M.Keynes. \nAnswer: \nAccording to J.M.Keynes, the three motives of demand for money are as follows:<\/p>\n | | | | | | |