Question

the Reserve Deposit ratio is 25% and the initial deposits of the public re Rs 2,000

,What is the value of deposit multiplier ,total deposit creation and total lending by the

banking system?​

Answer 1

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Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits.

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio = 100 / 12.5

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio = 100 / 12.5 = 8 times

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Answer 2

Explanation:

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits.

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio = 100 / 12.5

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.Cash reserve ratio = (primary deposit / total deposit) x 100 = (2,500 / 20,000) x 100 = 12.5 %Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. Multiplier = 1/ Cash reserve ratio = 100 / 12.5 = 8 times

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