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Calculate the value of money multipier ...

Calculate the value of money multipier and total deposit created if initial deposit is of 4000 crore and LRR is 10%

Text Solution

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LRR is 10% or 0.1 and money multiplier =`(1)/(LRR)`
Money multiplier =`(1)/(0.1)=10`
If initial deposit is of 4000 crore then,
Total deposit= Initial deposit xx Money multiplier
`=4000xx10=40000 Crore`
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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
    10
    D
    20

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