Macro

Money & Banking

Easy

Identify the correct money multiplier formula.

1/1-c

1/CRR

1/SLR

1/c

✅ Correct Option: 2

The money (credit) multiplier shows how much total deposits expand from a given amount of reserves. It is the reciprocal of the reserve ratio, i.e. $\frac{1}{CRR}$ . The formula $\frac{1}{1-c}$ is the investment multiplier, not the money multiplier.

2022: 30 Aug Shift 2

In India currency notes are issued by _______.

2025: 21 May Shift 1

Currency notes and coins are termed as ________.

2022: 10 Aug Shift 2

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

2026: 12 May Shift 1

Which of the following action by RBI leads to an increase in the supply of money in the economy:

2025: 29 May Shift 2

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

2023: 28 May Shift 2

Arrange the following statements relating to open market operations in the correct sequence.

(A) There by resulting in an increase in money supply

(B) Central bank pays for it by giving a cheque

(D) This increases the total amount of reserves in the economy

Choose the correct answer from the options given below :

Identify the correct money multiplier formula.

Solution

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