Match List-I with List-II
List-I List-II (A) Net Worth (I) Currency + Deposits (B) M₁ (II) Reserves + Loans (C) Assets (III) 1/ Cash Reserve Ratio (D) Money Multiplier. (IV) Assets – Liabilities
Choose the correct answer from the options given below:
Match List-I with List-II
| List-I | List-II |
|---|---|
| (A) Net Worth | (I) Currency + Deposits |
| (B) M₁ | (II) Reserves + Loans |
| (C) Assets | (III) 1/ Cash Reserve Ratio |
| (D) Money Multiplier. | (IV) Assets – Liabilities |
Choose the correct answer from the options given below:
Solution
Option 1: (A) - (IV), (B) - (I), (C) - (II), (D) - (III) -> Let's verify each match: (A) Net Worth correctly matches with (IV) Assets – Liabilities as net worth represents the ownership equity. (B) M₁ correctly matches with (I) Currency + Deposits as M₁ is the narrow money supply measure including currency with public and demand deposits. (C) Assets correctly matches with (II) Reserves + Loans as these are the primary components of a bank's asset side. (D) Money Multiplier correctly matches with (III) 1/Cash Reserve Ratio as the simple money multiplier is calculated as the reciprocal of CRR. -> correct
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