When Cash Reserve Ratio is 20% then with the deposit of Rs 1000, Money creation will be Rs 5000, Money multiplier is :
Answer & explanation
Correct answer: option 3
Money Multiplier = 1/CRR
MM=1/20%
MM=1/0.2=5
When Cash Reserve Ratio is 20% then with the deposit of Rs 1000, Money creation will be Rs 5000, Money multiplier is :
Correct answer: option 3
Money Multiplier = 1/CRR
MM=1/20%
MM=1/0.2=5