AfterBoards Logo
Skip to main contentSkip to solution

CUET Economics 2025 PYQs31 May Shift 1. Free, no login required.

Macro

past year questions, CUET Economics 2025 31 May Shift 1

Money & Banking

past year questions, Macro, CUET Economics 2025 31 May Shift 1

Medium

Suppose there is a fresh deposit of Rs. 10,000 in banks and cash reserve ratio is 0.5. How much is total deposit creation?

  1. 20,000
  2. 50,000
  3. 10,000
  4. 5000

Solution

✅ Correct Option: 1

Option 1 -> Using money multiplier (1/CRR = 1/0.5 = 2), total deposits = 10,000 × 2 = 20,000.

Option 2 -> This would require CRR of 0.2, not 0.5.

Option 3 -> This is only the initial deposit, not total creation.

Option 4 -> This is the amount kept as reserve (10,000 × 0.5), not total deposits.

Hence, Option 1: 20,000 -> The money multiplier formula is 1/CRR. With CRR = 0.5, the multiplier is 1/0.5 = 2. Total deposit creation = Initial deposit × Money Multiplier = 10,000 × 2 = Rs. 20,000. This means banks can create total deposits worth Rs. 20,000 from the initial Rs. 10,000 deposit when 50% must be kept as reserves -> correct

Related questions:

2022: 16 July Shift 2

Identify the correct statements from the following:

A. Currency is issued by the nation's Central Bank

B. To address the budget deficit, Central Bank sends money to the government

C. The economy's foreign exchange reserves are preserved by Central Bank

D. Central Bank does not control money supply and credit through monetary policy

E. Central Bank gives loans to the commercial Banks for short term

Choose the correct answer from the options given below :

2025: 3 June Shift 1

Kavish went to the supermarket with ₹5000 in his wallet to buy groceries for his family. He purchased vegetables, fruits and other household items, paying the respective prices at the counter. Which functions of money were being demonstrated in this real life scenario?

(A) Unit of Labour.

(B) Store of Value.

(C) Medium of Exchange.

(D) Measure of Creditworthiness.

Choose the correct answer from the options given below:

2025: 22 May Shift 2

Currency notes and coins cannot be refused by any citizen of the country for settlement of any kind of transaction due to which they are called __ __

2022: 10 Aug Shift 2

Which of the following is not a function of the Central Bank ?

2026: 6 June Shift 1

To discourage the lending by commercial bank which of the following tool can be used by Central Bank?

2023: 29 May Shift 2

If all the depositors, one day come to withdraw all the cash, what would be role played by RBI?

Keyboard Shortcuts

  • Left arrow: Previous question
  • Right arrow: Next question
  • S key: Jump to solution
  • Q key: Jump to question

CUET Economics Past Year Questions (Topic-Wise)