Q.

The smaller the Cash Reserve Ratio, the scope for lending by banks is :

A. greater
B. smaller
C. weaker
D. lesser
Answer» A. greater
Explanation: Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
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