Statement 1: The value of money multiplier is determined by the reserve ratio prevailing in the monetary system.
Statement 1: The value of money multiplier is determined by the reserve ratio prevailing in the monetary system.
Statement 2: The process of credit creation directly relates to the value of reserve ratio.
Alternatives:
(a) Both the Statements are true
(b) Both the Statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Anurag Pathak Changed status to publish January 6, 2024
Ans – (c)
Explanation:-
Statement 1 is true. The value of the money multiplier is determined by the reserve ratio prevailing in the monetary system.
Statement 2 is false as it is inversely related to the LRR.
Money Multiplier = 1/LRR
Anurag Pathak Changed status to publish January 6, 2024
