With a CRR of 20% and a fresh deposit of ₹100, the amount the bank can initially lend is:
A₹100
B₹500
C₹80
D₹20
Answer & Solution
Correct answer: C. ₹80
With CRR 20%, the bank keeps ₹20 of a ₹100 deposit and can lend the remaining ₹80.
Related questions
A bank turns deposits into loans instead of merely storing them. In doing so it acts as anThe central bank of the United States, which regulates banks and runs monetary policy, is Across a whole banking system, the amount of money that can be created is worked out with When banks hold only the minimum reserves required, or barely more, the situation is calleIn a mortgaged house, the home itself is the asset, while the mortgage is the:Subtracting what is owed from the value of the assets gives the:On that layout, liabilities are shown on the right and assets on the:Because of its two-column shape, that statement is often nicknamed a: