Economics · Economy
India's Reserve Money (M0) is also referred to as 'High-Powered Money' because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It carries the highest rate of interest among all monetary aggregates
- 2It includes only the currency issued by the Government of India
- 3It forms the base for multiple credit creation by the banking system✓
- 4It is backed entirely by gold and foreign exchange reserves
Correct answer
It forms the base for multiple credit creation by the banking system
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