solve both ------20 point
Answers
Answer:
11
Explanation:
No the step of reducing CRR will not help in controlling inflation as now banks are required to keep less of their funds with Central Bank in the form of cash so their lending capacity will increase and hence will lead to more money supply which will Trigger more inflation.
OR
Only a small portion of reserves is kept by banks as Reserves so that whenever the depositors want their money back then the banks have certain liquidity so that they can return them their money.
12
When aggregate demand is more than aggregate supply it leads to more production, more demand of labour and hence more wages .wages in nothing but income when income increases automatically aggregate supply increases which catches up the aggregate demand and hence aggregate demand is equal to aggregate supply.
Answer:
No the step of reducing CRR will not help in controlling inflation as now banks are required to keep less of their funds with Central Bank in the form of cash so their lending capacity will increase and hence will lead to more money supply which will Trigger more inflation.
OR
Only a small portion of reserves is kept by banks as Reserves so that whenever the depositors want their money back then the banks have certain liquidity so that they can return them their money.
12
When aggregate demand is more than aggregate supply it leads to more production, more demand of labour and hence more wages .wages in nothing but income when income increases automatically aggregate supply increases which catches up the aggregate demand and hence aggregate demand is equal to aggregate supply.
Explanation: