When the Reserve Bank of India announces an increase of the Cash Reserve Ratio , what does it mean ?
A higher cash reserve ratio requires banks to hold a larger fraction of deposits as reserves at the RBI, leaving less of a given deposit base available for lending. It does…
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When the Reserve Bank of India announces an increase of the Cash Reserve Ratio , what does it mean ?
Answer and explanation
Correct answer A
A higher cash reserve ratio requires banks to hold a larger fraction of deposits as reserves at the RBI, leaving less of a given deposit base available for lending. It does not directly describe lending funds of the RBI or Union Government.
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UGC NET Economics