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Worksheets

credit/ money multiplier , reserve money ,Monetary aggregate

Total questions: 52

Worksheet time: 52mins

Name
Class
Date
1.

If Cash Reserve Ratio (CRR) is 10%, what will be the Credit Multiplier?

a)

2

b)

5

c)

10

d)

20

2.

If CRR = 5%, then the Credit Multiplier = ?

a)

10

b)

15

c)

20

d)

25

3.

When CRR = 20%, what will be the Money Multiplier?

a)

4

b)

5

c)

6

d)

10

4.

If initial deposit = ₹1,000 and CRR = 10%, total money created = ?

a)

₹2,000

b)

₹5,000

c)

₹10,000

d)

₹1,100

5.

Credit Multiplier is the reciprocal of:

a)

Repo Rate

b)

CRR

c)

SLR

d)

Reverse Repo

6.

If banks keep 25% as reserve, then Credit Multiplier = ?

a)

2

b)

3

c)

4

d)

5

7.

Money Multiplier depends on:

a)

CRR

b)

SLR

c)

Both A and B

d)

None of these

8.

Reserve Money is also known as:

a)

Narrow Money

b)

High-Powered Money

c)

Broad Money

d)

Fiduciary Money

9.

M1 = ?

a)

Currency + Demand deposits + Other deposits

b)

Currency + Fixed deposits

c)

Currency + Savings deposits

d)

Currency only

10.

M3 = ?

a)

M1 + Time Deposits

b)

M1 + Gold Reserves

c)

M1 + Borrowings

d)

None

11.

M4 = ?

a)

M3 + Post Office Deposits

b)

M3 + Demand Deposits

c)

M3 + Cash Reserves

d)

None

12.

Narrow Money refers to:

a)

M1

b)

M2

c)

M3

d)

M4

13.

Which of the following is most liquid?

a)

M1

b)

M2

c)

M3

d)

M4

14.

If CRR = 4%, the Money Multiplier = ?

a)

10

b)

20

c)

25

d)

None

15.

Reserve Money = ?

a)

Currency in Circulation + Bankers’ Deposits + Other Deposits with RBI

b)

Only Currency with Public

c)

Only Bank Reserves

d)

None

16.

If total Reserve Money = ₹5000 crore, and Money Multiplier = 4, total Money Supply = ?

a)

₹1,250 crore

b)

₹20,000 crore

c)

₹12,500 crore

d)

₹2,000 crore

17.

Which of the following is not included in M1?

a)

Demand Deposits

b)

Time Deposits

c)

Currency with Public

d)

Other Deposits with RBI

18.

If Money Supply = ₹50,000 and Reserve Money = ₹10,000, find Money Multiplier.

a)

4

b)

5

c)

6

d)

8

19.

If Money Multiplier = 5 and Reserve Money = ₹2,000, then Money Supply = ?

a)

₹10,000

b)

₹12,000

c)

₹8,000

d)

₹2,500

20.

Which is broader measure of money?

a)

M1

b)

M2

c)

M3

d)

M4

21.

If CRR = 10%, SLR = 20%, find Money Multiplier.

a)

2

b)

3.33

c)

4

d)

5

22.

If ₹500 is deposited and CRR = 10%, find total credit created.

a)

₹1,000

b)

₹2,000

c)

₹5,000

d)

₹10,000

23.

If public prefers to hold 20% cash of deposits and CRR = 10%, find Multiplier.

a)

4

b)

5

c)

3.33

d)

2.5

24.

If M1 = ₹5,000, Time Deposits = ₹2,000, then M3 = ?

a)

₹5,000

b)

₹6,000

c)

₹7,000

d)

₹8,000

25.

If Reserve Ratio = 0.1 and Cash with Public = ₹100, total Money Supply = ?

a)

₹1,000

b)

₹900

c)

₹1,100

d)

₹1,200

26.

If total reserve = ₹2,000 and deposit = ₹10,000, CRR = ?

a)

5%

b)

10%

c)

15%

d)

20%

27.

If total reserve = ₹2,000 and deposit = ₹10,000, CRR = ?

a)

5%

b)

10%

c)

15%

d)

20%

28.

A rise in CRR will lead to:

a)

Decrease in Money Multiplier

b)

Increase in Money Multiplier

c)

No change

d)

Increase in deposits

29.

When people hold more cash in hand, Money Multiplier will:

a)

Increase

b)

Decrease

c)

Remain constant

d)

Uncertain

30.

If M3 = ₹1000 and M1 = ₹600, Time Deposits = ?

a)

₹300

b)

₹400

c)

₹500

d)

₹600

31.

If CRR = 8% and initial deposit = ₹1000, total deposit created = ?

a)

₹10,000

b)

₹12,500

c)

₹8,000

d)

₹6,250

32.

If H = ₹500 and m = 4.5, Money Supply = ?

a)

₹1,000

b)

₹2,000

c)

₹2,250

d)

₹2,500

33.

M2 includes:

a)

M1 + Post Office Savings

b)

M1 + Time Deposits

c)

M3 + Post Office Deposits

d)

Only M1

34.

If CRR = 5% and SLR = 20%, then effective reserve = ?

a)

15%

b)

20%

c)

25%

d)

30%

35.

Increase in high-powered money causes:

a)

Fall in Money Supply

b)

Rise in Money Supply

c)

No change

d)

None

36.

If Cash with Public = ₹200, Demand Deposits = ₹800, Other Deposits = ₹100 → M1 = ?

a)

₹900

b)

₹1000

c)

₹1100

d)

₹1200

37.

If CRR = 10%, people hold 15% cash of deposits, find Money Multiplier.

a)

4

b)

5

c)

3.5

d)

2.5

38.

Money Supply = ₹10,000, H = ₹2,500 → Money Multiplier = ?

a)

2

b)

3

c)

4

d)

5

39.

If H = ₹4,000, m = 3.5, M = ?

a)

₹12,000

b)

₹14,000

c)

₹15,000

d)

₹16,000

40.

If RBI increases CRR from 10% to 20%, multiplier falls from ?

a)

10 → 5

b)

5 → 2.5

c)

20 → 10

d)

Both A and B

41.

If total Money Supply = ₹80,000, Money Multiplier = 4, find Reserve Money.

a)

₹10,000

b)

₹20,000

c)

₹25,000

d)

₹30,000

42.

If CRR = 10%,

→ credit multiplier = ?

a)

₹500

b)

10

c)

₹700

d)

₹800

43.

If Money Supply = ₹1,00,000, H = ₹25,000 → Find CRR (assuming no cash leakage).

a)

10%

b)

20%

c)

25%

d)

None

44.

M3 – M1 = ?

a)

Currency

b)

Demand Deposits

c)

Time Deposits

d)

None

45.

If banks lend less, then Money Multiplier will:

a)

Increase

b)

Decrease

c)

Remain same

d)

Unpredictable

46.

If H = ₹3000 and M = ₹12000, then (CRR + C/D) = ?

a)

0.25

b)

0.3

c)

0.4

d)

0.5

47.

Narrow money refers to:

a)

All bank deposits

b)

Only demand deposits + currency

c)

Only currency

d)

Cash + time deposits

48.

If M = ₹1,50,000, H = ₹30,000, and C/D = 0.25 → find CRR.

4 lines
49.

If public increases cash-deposit ratio, what happens?

a)

Money Multiplier increases

b)

Money Multiplier decreases

c)

No effect

50.

In India, M3 is also known as:

a)

Broad Money

b)

Reserve Money

c)

High-Powered Money

d)

Narrow Money

51.

If reserve money = ₹1000 and total deposits = ₹4000 → CRR = ?

a)

10%

b)

20%

c)

25%

d)

None

52.

When public shifts money from savings deposits to fixed deposits, which of the following falls?

a)

M1

b)

M2

c)

M3

d)

M4