📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      If the cash reserve ratio (CRR) decreases, what will

      happen to credit creation?
      A Increase Correct Answer Incorrect Answer
      B Decrease Correct Answer Incorrect Answer
      C No change Correct Answer Incorrect Answer
      D First decrease, then increase Correct Answer Incorrect Answer

      Solution

      A lower CRR means banks are required to hold fewer reserves, allowing them to lend more. This increases the money supply and boosts credit creation in the economy.

      Practice Next
      ask-question