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If Primary deposit is 1000 ,calculate th...

If Primary deposit is 1000 ,calculate the deposit/money multipler when
(a) Legal reserve ratio is 20% , (b) Legal reserve ratio is 80%
Also find the money created by banks.

Text Solution

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a, 5,5000,b1.25,1250
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Knowledge Check

  • What is the value of money multiplier when initial deposits ₹500crores and LRR is 10%?

    A
    0.1
    B
    0.2
    C
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    D
    20

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