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CUET Economics 2025 PYQs29 May Shift 2. Free, no login required.

Macro

past year questions, CUET Economics 2025 29 May Shift 2

Money & Banking

past year questions, Macro, CUET Economics 2025 29 May Shift 2

Easy

At a given cash reserve ratio of 50% with deposits of ₹ 1000, the amount which can be used to give loans by the bank.

Solution

✅ Correct Option: 2

Option 1 -> ₹50 represents only 5% of deposits, which is incorrect.

Option 2 -> ₹500 is the amount remaining after keeping 50% CRR, which is correct.

Option 3 -> ₹100 represents only 10% of deposits, which is incorrect.

Option 4 -> ₹1000 would mean no reserve is maintained, violating the 50% CRR requirement.

Hence, Option 2: ₹500 -> When CRR is 50%, the bank must keep 50% of deposits (₹500) as reserves with the central bank. The remaining 50% of deposits (₹1000 - ₹500 = ₹500) can be used for giving loans to customers. This is calculated as: Loanable Amount = Deposits × (1 - CRR) = ₹1000 × (1 - 0.50) = ₹500 -> correct

Related questions:

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  1. Repo Rate.
  2. Reverese Repo Rate.
  3. Bank Rate.
  4. Saving Rate.

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Which of the following is incorrect about the relaxations given by the government to reduce cash crunch immediately after demonetization?

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Which is the apex regulatory body of the Indian banking system and in which year it came into existence?

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Which of the following statements is correct with reference to the Cash Reserve Ratio (CRR)?

A. The RBI decides a certain percentage of deposits which every bank must keep as reserves with the central bank

B. To ensure that no bank is 'over lending'

C. This is a legal requirement and is binding on the banks

D. Cash Reserve Ratio and Statutory Liquidity Ratio are the same concept.

Choose the correct answer from the options given below:

  1. (A), (B) and (D) only
  2. (A), (B) and (C) only
  3. (A), (B), (C) and (D)
  4. (B), (C) and (D) only

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What was the negative impact of demonetization?

2024: 16 May

Which of the following statements are true?

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