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Money Creation by Banks · Question 38 of 58

Question 38

MediumOriginal question

With a reserve ratio of 12.5%, a fresh deposit of ₹400 crore can lead to total deposits of

Options for question 38

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. Multiplier = 1 ÷ 0.125 = 8.

  2. Total deposits = 400 × 8 = ₹3,200 crore.

Concept
Total deposits
Typical time
70 s
Your time
—
The rule this testsThe money multiplier
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Ten questions from Money Creation by Banks, at your own pace.

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Ten questions from Money Creation by Banks, at your own pace.

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