Practicing Success
Match the following:
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1-B , 2-C , 3- D, 4- A 1-A , 2-B , 3- C, 4- D 1-A , 2-C , 3- B, 4- D 1-C , 2-B , 3- A, 4- D |
1-C , 2-B , 3- A, 4- D |
If we decrease CRR, the banks will have more money to lend, which will increase the money supply. If we increase SLR, the banks will have less money left with them to lend, which will decrease the supply of money in the economy. When, commercial banks have surplus funds, they park it with RBI and the rate of return which they get is known as reverse repo rate. Whereas, when commercial banks require funds for a small period of time, they borrow from reserve bank of India against approved security. The rate charged for the same is called as repo rate.
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