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Ans – (b) Solution:- If LRR is 25% Money Multiplier = 1/LRR Money Multiplier = 1/25% Money Multiplier = 4 times If LRR is 20% Money Multiplier = 1/LRR Money Multiplier = 1/20% Money Multiplier = 5 times Money Multiplier…

Ans – (c) Explanation:- The Reserve bank of India is authorised to issue the paper current notes except one rupee note. Ministry of Finance is authorized to issue one rupee note and coins of all denominations. The coins issued by…

Ans – (d) Explanation:- Bank Rate is a Quantitative method of the Monetary policy of the RBI to control the money supply. Monetary Policy is the measure taken by the Reserve Bank of India to control the money supply or…

Ans – (b) Explanation:- Margin Requirements:- Margin is the difference between the amount of the loan and the market value of the security offered by the borrower against the loan. If the margin fixed by the Central bank is 40%,…

Ans – (b) Explanation:- The Reserve Bank of India (RBI) is empowered to regulate the money supply in the economy through its ‘Monetary Policy’. It is the policy adopted by the Central Bank of an economy in the direction of…

Ans – (d) Explanation:- The central bank can borrow money from the commercial bank in need. The commercial bank can also money from the central bank as the central bank is the last resort. The central government and all state…

Ans – (c) Explanation:- The Reserve Bank of India (RBI) is empowered to regulate the money supply in the economy through its ‘Monetary Policy’. It is the policy adopted by the Central bank of an economy in the direction of…

Ans – (c) Explanation:- LIC is not a bank, it does not open the demand deposits such as savings and current accounts of the general public. It is just a financial institution. It offers loans and time deposits but does…

Ans – (c) Explanation:- The Ministry of Finance of the government of India issues one rupee not and coins of all denominations as per section 6 of the coinage act, 2011. Additional Information:- It bears the signatures of the Finance…

Ans – (a) Solution:- Initial deposits = 1/6 of the total deposits Total deposits = Money Multiplier Money Multiplier = Initial Deposits/Total Deposits Money Multiplier = 1/1/6 Money Multiplier = 6 times