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12th Class Economics Money And Banking Question Bank MCQs - Money and Banking

  • question_answer
    If total amount of money created in the system is Rs. 10,000 with legal reserve ratio being 25%. How much will be the primary deposits?

    A) Rs. 1,500

    B) Rs. 2,000

    C) Rs. 2,500

    D) Rs. 4,000

    Correct Answer: C

    Solution :

    Money Created
    = Primary Deposits \[\times \] Money Multiplier
    10,000 = Primary Deposits \[\times \] (1/0.25)
    Primary Deposits = 10,000 / 4 = Rs. 2,500
     


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