the value of CRR is 8% and Aishwarya is 12% if the initial deposit in the economist rupees 2000 the value of money multiplier and total deposits are
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Given: the value of CRR is 8% and Aishwarya is 12% if the initial deposit in the economist rupees 2000.
To find: the value of money multiplier and total deposits
Solution:
The formula for money multiplier when initial deposit and cash reserve ratio is given will be= 1/CRR into initial deposits
1/8 percent into 2000
= 100 into 2000/8 = 25,000
The credit multiplier will be 25,000
Total deposit = initial deposit into the statutory liquidity ratio.
= 2000 into 12 percdnt= 240
Total deposit= 2240.
The value of money multiplier is 25,000 and total deposits are 2240.
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