the reserve bank of india increased the cash reserve ratio by 0.25 basis points to overcome the inflationary trends in the economy. identify the dimension of business environment highlighted in the given statement
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The dimension highlighted is Economic Environment.
This environment encompasses all external economic factors that influence people's and enterprises' purchasing behaviours, and so affect a firm's productivity.
It is affected by tax rates, exchange rates, inflation, wages etc.
The CRR is the proportion of deposits that banks must retain in reserve. It is generally increased by the RBI, requiring banks to hold more money in reserves.
This lowers the amount of money accessible to banks, thereby reducing the amount of money flowing into the economy.
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