Money & Banking -1

Value of Money multiplier __________ with an increase in Cash Reserve Ratio (CRR)

• increases

• decreases

• remains unchanged

Supply of money refers to

• currency held with the public

• currency held by Reserve Bank of India

• currency held by the public and demand deposits of the public with commercial banks

• currency held in the government account

Which of the following function of money has led to the development of financial system?

• medium of exchange

• common measure of value

• store of value

• standard of deferred payments

_____________ is the main source of money in an economy.

• central bank

• commercial banks

• both central bank & commercial banks

• government

If Reserve deposit ratio is 25%, the value of money multiplier will be

• 2

• 4

• 8

• 12

Loans offered by commercial banks ___________ the money supply in the economy.

• increases

• decreases

What will be the legal reserve ratio if the initial deposit of Rs. 25,000 crore lead to a creation of total deposits of Rs. 1,25,000 crore?

• 25%

• 20%

• 125%

• 12.5%

If the legal reserve ratio is 10% and inital deposit is Rs. 2000, then total credit creation will be _________

• Rs. 20000

• Rs. 25000

• Rs. 30000

• Rs. 50000

The total stock of money in circulation among the public __________ is called a 'money supply'.

• during a period of time

• during a calendar year

• during a fiscal year

• at a particular period of time

___________ are called legal tenders.

• demand deposits

• time deposits

• inter-bank deposits

• currency notes and coins