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प्रश्न
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).
पर्याय
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
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उत्तर
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
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संबंधित प्रश्न
Credit creation by commercial banks is determined by (Choose the correct alternative)
Explain the credit creation role of commercial banks with the help of a numerical example.
Answer the following question.
What role does it play in determining the credit creation power of the banking system? Use a numerical illustration to explain.
______ is the main source of money supply in an economy.
Identify which of the following Statement is true?
Which of these banks formulates the credit control tools?
Match the following:
| Column I | Column II | ||
| A. | Primary deposits | (i) | Payable on demand |
| B. | Derivative deposits | (ii) | Deposits for a fixed period of time |
| C. | Demand deposits | (iii) | Cash deposits of people |
| D. | Term deposits | (iv) | Deposits created by banks (or loan deposits) |
Explain briefly the process of credit creation by commercial banks.
What is meant by primary deposits?
How money multiplier is related to Legal Reserve Ratio?
