Question

suppose in an economy the initial deposits of rs500 crore leads to the creation of total deposit worth rs 5000 crore​

Answer 1

Answer:

Calculate the value money multiplier and the total deposit created if initial deposit is of Rs. 500 crores and LRR is 10%. Ans: Money multiplier = 1/LRR which is equal to 1/0.1-10 Initial deposit Rs. 500 crores Total deposit: = Initial deposit x money multiplier = 500 x 10 = 5000 crores.