A rise in the CRR

increases the funds banks can lendCorrect answerYour answerhas no effect on lendingCorrect answerYour answerreduces the funds banks can lend and lowers the money multiplierCorrect answerYour answerlowers the repo rateCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

More of each deposit is locked with the RBI, so less is lent and less is redeposited.

Concept: Raising the CRR
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsCRR and SLR

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A rise in the CRR

Explanation