During deficient demand, a cut in the CRR works mainly by

raising taxesCorrect answerYour answercutting government spendingCorrect answerYour answerraising the exchange rateCorrect answerYour answerfreeing funds for banks to lendCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Banks keep less with the RBI, so they can lend more, and more credit supports spending.

Concept: How a CRR cut works
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsMonetary measures

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Ten questions from Excess & Deficient Demand, at your own pace.

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Ten questions from Excess & Deficient Demand, at your own pace.

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During deficient demand, a cut in the CRR works mainly by

Explanation