Question
When Cash Reserve Ratio is 20% then with the deposit of Rs 1000, Money creation will be Rs 5000, Money multiplier is:
(

This question was previously asked in

Shift 28/05/2023 3:30 PM - 6:30 PM

0.5

0.05

1/5

Correct Answer

To calculate the money multiplier, you can use the following formula:

Money Multiplier = 1 / (Cash Reserve Ratio)

Given the Cash Reserve Ratio (CRR) is 20%, you can express it as a fraction: 20% = 0.20

Now, use the formula:

Money Multiplier = 1 / 0.20 = 5

So, the money multiplier is (3) 5.

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Question
Which of the following will be included in the National Income of India?
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(B) Payment of Income Tax
(C) Scholarship given to students
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