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UPSC PYQPrelims 2021

Civil Services Examination · प्रश्न 11

The money multiplier in an economy increases with which one of the following?

  1. Increase in the Cash Reserve Ratio in the banks
  2. Increase in the Statutory Liquidity Ratio in the banks
  3. Increase in the banking habit of the people
  4. Increase in the population of the country
उत्तर देखें और व्याख्या

उत्तर: (C) Increase in the banking habit of the people

व्याख्या

More banking habit means less currency held by the public and more deposits available for credit creation, which raises the multiplier. Higher CRR/SLR reduce it.