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प्रश्न
Credit money is increased when CRR:
पर्याय
Falls
Rises
Both falls and rises
None of the above
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उत्तर
Falls
Explanation:
Credit money rises when the Cash Reserve Ratio (CRR) or General Reserve Ratio (GRR) falls. When the central bank lowers the reserve ratio, commercial banks have more funds to lend, boosting credit creation in the economy. When the reserve ratio grows, banks must keep more funds in reserve, limiting their ability to lend and cutting credit money.
संबंधित प्रश्न
Define Credit Multiplier.
The process of money creation or credit creation is done by ______.
What do you mean by credit creation by commercial banks?
Explain the role of legal reserve ratio and Bank rate in correcting inflationary gap in an economy.
Identify which of the following Statement is true?
Deposits made by the people from their own resources are called ______.
If legal reserve ratio is 20%, the value of money multiplier would be ______.
Match the following and select the correct option.
| Column A | Column B | ||
| (i) | A deposit created by a customer | A. | Term deposit |
| (ii) | A deposit created by bank when loan is granted | B. | Demand deposits |
| (iii) | Deposits payable by bank on demand | C. | Initial deposit |
| (iv) | Deposits the amount of which can be withdrawn only after a fixed period of time | D. | Secondary deposit |
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Credit Creation comes to an end when total cash reserves become equal to the initial deposits.
Reason (R): The value of money multiplier is determined by Legal Reserve Ratio (LRR).
How money multiplier is related to Legal Reserve Ratio?
