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Question
If the amount of LRR is 20% and the initial deposit is ₹1000 crores, then it will create the total amount of money in the economy equal to ______
Options
₹6000 crores
₹5000 crores
₹7000 crores
₹8000 crores
MCQ
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Solution
If the amount of LRR is 20% and the initial deposit is ₹1000 crores, then it will create a total amount of money in the economy equal to ₹5000 crores.
Explanation:
If the LRR is 20%, a deposit of ₹1000 crores would result in a total quantity of money in the economy of ₹1000 × 1/0.2 = ₹5000 crores.
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