Macro

Money & Banking

Easy

Which among the following limits the money multiplier process?

Interest rate.

Cash Reserve Ratio.

Inflation.

Unemployment.

✅ Correct Option: 2

Banks must hold a fraction of deposits as reserves with the RBI under the Cash Reserve Ratio. Since only the remainder can be lent out, each round of deposit creation shrinks, limiting the money multiplier, which equals $1/CRR$ (approximately, given reserve requirements). Hence CRR limits the multiplier process.

2023: 29 May Shift 2

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

2023: 29 May Shift 2

Chronologically arrange the following events.

A. Announcement of Demonetisation

B. Circulation of Fake Currency

C. Rs 500 and 1000 Notes lost legal tender

D. Impact on Economic Activities

E. New Rs 2000 Currency Note in the circulation

Choose the correct answer from the options given below:

2025: 16 May Shift 1

What was the negative impact of demonetization?

2025: 26 May Shift 2

Which of the following is a quantitative tool of credit control by the reserve bank of India?

2025: 28 May Shift 2

When is Demonetisation, a new initiative was taken by the Government of India?

2023: 29 May Shift 2

As a bankers' bank, what is the role played by RBI?

A. Custodian of cash reserves

B. Maintain Foreign Exchange Reserves

C. Currency Issue

D. Lender of last resort

E. Clearing house

Choose the correct answer from the options given below:

Which among the following limits the money multiplier process?

Solution

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