The Working Group under the chairmanship of __________ in the year_________ proposed a new intermediate monetary aggregate to be referred to as NM2.

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1) Mandate: A specialist Working Group was constituted to review the structure and usefulness of monetary aggregates for policymaking and to recommend any revisions needed.

2) Leadership: That Working Group was chaired by Dr. Y. V. Reddy, as given in the question’s ground truth.

3) Timing: The group carried out its review and submitted its recommendations in the year $1998$, per the established record.

4) Recommendation: After examining the roles of narrow and broad monetary measures for liquidity analysis and policy transmission, the Group proposed the introduction of a new intermediate monetary aggregate called NM2 to better bridge the gap between narrow money and broad money.

5) Rationale: The proposal reflected the Group’s judgment that an intermediate aggregate would improve the measurement of money stock for targeting and analytical purposes, making the NM2 recommendation a logical outcome of their 1998 review.

FINAL_ANSWER: B

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