Given a cash reserve ratio of 50 per cent and reserves of Rs 100, what is the money multiplier?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 2
CRR = 50% = 0.5
Money Multiplier=1 / CRR
= 1/ 0.5 = 2
Given a cash reserve ratio of 50 per cent and reserves of Rs 100, what is the money multiplier?
Correct answer: option 2
The correct answer is Option (2) → 2
CRR = 50% = 0.5
Money Multiplier=1 / CRR
= 1/ 0.5 = 2