BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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12.5%
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10%
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15%
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None of these
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Detailed explanation-1: -Answer. Or, LRR=0.125 or 12.5%.
Detailed explanation-2: -Value of money multiplier = 1/LRR which is equal to 1/0.1 = 10 Initial deposit was Rs. 500 crores Hence Total Deposit will be Initial Deposit × Money Multiplier = 500 ×10 = 5000 Crores www.vedantu.com 4 Page 5 Q17.
Detailed explanation-3: -Ans: Money Multiplier = 1/LRR = 1/025 = 4 Initial Deposit = Total Deposit / Money Multiplier = 12000 / 4 Page 6 Class XII Macro Economics www.vedantu.com 6 = Rs.
Detailed explanation-4: -Money multiplier = 1/LRR = 1/0.2 = 5.
Detailed explanation-5: -The initial deposits of ₹10, 000 have been made into the bank, and the banks are required to maintain 20% of the deposits with them as the LRR is 20%, therefore the bank has to maintain 20% of ₹10, 000 i.e. ₹2, 000 with itself and can lend the rest of the money i.e. ₹8, 000 as loans to the public.