Practice - Money Creation by Banking System
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Practice Questions
Test your understanding with targeted questions
What is the money multiplier when the CRR is 25%?
💡 Hint: Use the formula 1/CRR.
How much of a Rs 200 deposit can a bank lend out if CRR is 20%?
💡 Hint: Calculate 20% of 200 for reserves.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does the money multiplier indicate about bank deposits?
💡 Hint: Remember how deposits lead to loans in the banking system.
True or False: A higher CRR allows banks to lend more money.
💡 Hint: Think about how reserves affect lending.
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Challenge Problems
Push your limits with advanced challenges
If a country's banking system has a total reserve of Rs 500, under a CRR of 10%, calculate how much total money can be created.
💡 Hint: Remember to use the money multiplier formula.
Discuss the effects of changing the CRR from 5% to 15%. How would this affect the money supply in the economy?
💡 Hint: Consider how reserves relate to total money available for lending.
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Reference links
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