Other name for legal reserve requirement is ____.
Other name for legal reserve requirement is ____.
(a) Cash reserve ratio
(b) Statutory liquidity ratio
(c) Variables reserve ratio
(d) Bank rate
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Ans – (c)
Explanation:-
The legal Reserve Requirement is also known as Variable Reserve Ratio.
It has two components:
1. Cash reserve ratio
2. statutory Liquidity Ratio
This ratio is controlled by the central bank and can be changed as per the requirement.
It directly controlled the money and credit supply in the economy.
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