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Money Creation by Banks · Question 12 of 58

Question 12

EasyOriginal question

A bank has deposits of ₹500 crore and the required reserve ratio is 20%. Its required reserves are

Options for question 12

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. Required reserves = 20% of 500 = ₹100 crore.

  2. The other ₹400 crore can be lent.

Concept
Required reserves
Typical time
40 s
Your time
—
The rule this testsReserves and the reserve ratio
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Ten questions from Money Creation by Banks, at your own pace.

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