ECONOMICS
MONEY
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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: -Legal Reserve Ratio: It is the minimum ratio of deposits legally required to be kept by the commercial banks with themselves (Statutory Liquidity Ratio) and with the central bank (Cash reserve Ratio).
Detailed explanation-5: -Money multiplier = 1/LRR = 1/0.2 = 5.