Home
Class 12
ECONOMICS
Define legal reserve ratio?...

Define legal reserve ratio?

Text Solution

Verified by Experts

It is minimum ratio (Fixed by RBI) of depositys of commerical banks which is legally compulsory for them to keep as reserves.
Doubtnut Promotions Banner Mobile Dark
|

Topper's Solved these Questions

  • Banking

    RADHA BHUGANA|Exercise Conceptual Questions|7 Videos

  • Banking

    RADHA BHUGANA|Exercise Higher Order Thinking Skills|5 Videos

  • Banking

    RADHA BHUGANA|Exercise Multiple Choice Question|15 Videos

  • BALANCE OF PAYMENTS

    RADHA BHUGANA|Exercise VERY SHORT ANSWER TYPE QUESTIONS|5 Videos

  • CIRCULAR FLOW OF INCOME

    RADHA BHUGANA|Exercise LONG ANSWER TYPE QUESTION|4 Videos

Similar Questions

Explore conceptually related problems

If the money created by the banking system is 1000 and the primary deposit is 250 what is the value of the deposit multiplier and the legal reserve ratio?

There is an inverse relationship between legal reserve ratio (LRR) and value of money multiplier. OR Size of money multiplier is given by the inverse of LRR.

Knowledge Check

  • Higher the lega reserve ratio _____will be the credit creation:

    A
    higher
    B
    lower
    C
    constant
    D
    none of these

  • Increase in cash reserve ratio will lead to:

    A
    Fall in Aggregate Demand
    B
    Rise in Aggregate Demand
    C
    No change in Aggregate Demand
    D
    None of these

    • Similar Questions

    Explore conceptually related problems

    If the initial deposit is 800 and the legal reserve ratio is 25% what is the money created by the banking system?

    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.

    What is legal Reserve Ratio? Explain its components

    lf legai reserve ratio is 20%, what will be the value of money multiplier?

    The ratio ottotal deposits that a commercial bank has to keep with Keserve Bank ot India is ca lled: (choose the correct alternative) (a) Statutory liquidity rado (b) Deposit ratio (c) Cash reserve ratio (d) Legal reserve ratio

    How can a central b ank control excess demand in an econ omy by making changes in the legal reserve requirements?

    Home
    Profile