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प्रश्न
To ensure that the citizens of the country have faith in the currency, the currency is issued by:
विकल्प
Commercial banks
Central government
Central bank
Ministry of finance
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उत्तर
Central bank
Explanation:
- The currency issue is the responsibility of a country's central bank (in India, the Reserve Bank of India).
- The central bank guarantees that citizens have faith in the currency by maintaining its honesty and stability.
- The central bank's currency is government-backed, but the central bank is responsible for issuing it, not commercial banks or the Ministry of Finance.
APPEARS IN
संबंधित प्रश्न
______ is the main source of money supply in an economy.
______ is the rate of interest charged by the central bank on loans given to the commercial bank.
Explain the role of legal reserve ratio and Bank rate in correcting inflationary gap in an economy.
''The process of credit creation by commercial banks comes to an end when the total of required reserves become equal to the initial deposits."
With the help of a numerical example, prove that the given statement is true.
If legal reserve ratio is 20%, the value of money multiplier would be ______.
Credit money is increased when CRR:
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"` |
Explain briefly the process of credit creation by commercial banks.
Why are the banks required to keep only a fraction of deposits as cash reserves?
The deposit multiplier formula is ______.
