Question : Money multiplier uses which of the following monetary instruments for its calculation?
Option 1: Repo rate
Option 2: Cash Reserve Ratio
Option 3: Reverse repo rate
Option 4: Bank rate
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Correct Answer: Cash Reserve Ratio
Solution : The correct option is the Cash Reserve Ratio .
The money multiplier relies on the Cash Reserve Ratio (CRR) as a key monetary instrument for its calculation. CRR is the percentage of bank deposits that must be held in reserve with the central bank, influencing the amount of money banks can create through credit creation.
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Question : The minimum rate below which banks are not allowed to lead money except in cases specified by the Reserve Bank of India is called ______.
Question : _____________is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks of the country.
Question : Which of the following is the instrument of monetary policy used by RBI?
Question : What is the meaning of reverse repo rate?
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