What happens to money supply if the RBI increases the cash reserve ratio? Option 1: Money supply increases. Option 2: Money supply decreases. Option 3: Money supply remains constant. Option 4: No change in money supply.

The answer is 'Money supply decreases.'. View full solution:

CUET Economics - What happens to money supply if the RBI increases the cash reserve ratio? | PYQs + Solutions

CUET Economics 2025 29 May Shift 1

Macro

Easy

Money supply increases.

Money supply decreases.

Money supply remains constant.

No change in money supply.

✅ Correct Option: 2

Related questions:

3 June Shift 1

If the central bank wants to reduce the money supply in the economy, what it may do from the following?

(A) Increase bank rate.

(B) Reduce cash reserve ratio.

(D) Buy securities in the open market.

Choose the correct answer from the options given below:

31 May Shift 1

If the market rate of interest is already low enough so that everybody expects it to rise in future, causing capital losses, nobody will wish to hold bonds. This situation is called.............

Jevons Paradox
Liquidity trap
Paradox of thrift
Double coincidence of wants

CUET Economics 2023 Slot 5

Calculate the total deposits made by commercial banks when the primary deposit is Rs. 20 Crores and cash reserve ratio is 20%. Choose the correct option.

CUET Economics 2025 29 May Shift 1 PYQs

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