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प्रश्न
Suppose in an economy, the initial deposit of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crore. Then the value of reserve requirements would be ______.
विकल्प
0.01
1
0.1
0.21
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उत्तर
Suppose in an economy, the initial deposit of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crore. Then the value of reserve requirements would be 0.1.
Explanation:
Money Multiplier = `1/"Reserve Ratio"`
Also, Money Multiplier = `"Total Deposits"/"Initial Deposit"`
Given:
Initial deposit = ₹400 crores
Total deposits = ₹4000 crores
Step 1: Calculate the Money Multiplier
Money Multiplier = `4000/400 = 10`
Step 2: Calculate the Reserve Requirement (Reserve Ratio)
Reserve Ratio = `1/"Money Multiplier" = 1/10 = 0.1`
संबंधित प्रश्न
Explain the credit creation role of commercial banks with the help of a numerical example.
Define Credit Multiplier.
______ is the main source of money supply in an economy.
The ______ creation is called credit creation.
Credit creation by the commercial bank is determined by ______.
Read the given extract carefully and answer the following questions.
| Mr. X wanted to buy an expensive motorcycle for his son but he did not have sufficient money to buy it. He approached a public sector commercial bank for the loan. The bank asked Mr. X to deposit 20% cash of the loan amount and rest 80% of the loan amount was given by the bank. |
- Briefly explain a Commercial Bank.
- What is the regulation of consumer credit in selective credit control?
- Name the bank which controls all the commercial banks and financial institutions in the country.
Identify which of the following Statement is true?
Match the following:
| Column I | Column II | ||
| A. | Formula of Money Multiplier | (i) | Inverse |
| B. | Money multiplier = 4 | (ii) | Money multiplier = 10 |
| C. | Relationship between LRR and money multiplier | (iii) | LRR = 0.25 |
| D. | LRR = 0.1 | (iv) | `1/"LRR"` |
The deposit multiplier formula is ______.
"Loans create deposits" means banks grant loans by ______.
