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Money Creation by Banks · Question 29 of 58

Question 29

HardOriginal question

An initial deposit of ₹500 crore is made and the reserve ratio is 10%. Total loans created by the banking system are

Options for question 29

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. Total deposits = 500 × 10 = 5,000.

  2. Total loans = 5,000 − 500 = ₹4,500 crore.

Concept
Total loans
Typical time
100 s
Your time
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The rule this testsDeposit creation, round by round
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