What would happen to the “money multiplier” in an economy, if the cash reserve ratio (CRR) is reduced?
The money multiplier would increase.
The money multiplier would decrease.
The money multiplier would remain constant.
There is no relationship between the money multiplier and the cash reserve ratio (CRR).
• The money multiplier describes how an initial deposit leads to a greater final increase in the total money supply.
• When an initial deposit is made in the banks, the banks can further lend loans by keeping a certain percentage as Cash Reserve Ratio (CRR). For instance, if a deposit of Rs. 100 is made into the banks, then the banks would have to keep Rs. 10 as reserve (considering CRR as 10%) and they may lend Rs. 90 in the form of loans. Now, when this Rs. 90 is deposited into the bank again, the bank would keep Rs. 9 as reserves and lend remaining Rs. 81 in the form of loans. Thus, the initial deposit of Rs. 100 with the banks has led to the creation of money by the banks in the form of new loans.
• This is referred to as “Money Multiplier”. It is calculated as (1/R) where R is the “Reserve” requirement. Hence, the money multiplier is inversely proportional to the reserve requirement, i.e., as the CRR is reduced, the money multiplier would increase.
A spherical balloon of radius r subtends angle 60° at the eye of an observer. If the angle of elevation of its centre is 60° and h is the height of the centre of the balloon, then which one of the following is correct?
Miscellaneous · Easy
The main source of energy in Sun is :
Miscellaneous · Easy
Match the underlined word in each of the sentences with the correct parts of speech and indicate your response on the answer sheet accordingly. Oh no! I am getting late for the function.
Miscellaneous · Easy
The first and sixth sentences are given as S1 and S6. The middle four sentences in each have been jumbled up and labelled as P, Q, R and S. You are required to find the proper sequence of the four sentences and mark your response accordingly S1: Our Constitution makers were fully conscious of the fact that the Scheduled Castes and Scheduled Tribes had been oppressed and underprivileged sections of our society over the centuries and they deserved a special dispensation so that their condition may be vastly improved. P: Similarly, they were also sensitive of the difficulties and problems which were likely to be faced by the persons belonging to the Anglo-Indian community in the country. Q: One such provision related to the reservation of seats for these communities in the Lok Sabha and State Legislative Assemblies. R: This provision found place in Article 330 and Article 332 of the Constitution. S: For this purpose, several special provisions were incorporated in our Constitution. S6: Consequently, adequate safeguards were provided for these communities in our Constitution. The correct sequence should be:
Miscellaneous · Easy