What will be the amount of initial reserves if Cash Reserve Ratio (CRR) is 20 % and total credit creation is Rs 500?
What will be the amount of initial reserves if Cash Reserve Ratio (CRR) is 20 % and total credit creation is Rs 500?
Solution
✅ Correct Option: 4
Money multiplier = . Total credit = Initial reserves multiplier. So initial reserves = Rs 100.
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