NextQ10

Justify the following statements with valid arguments : (i) Money supply in an economy is an example of a stock variable. (ii) The Central Bank provides several Banking services to the government. Assuming for a hypothetical economy, Central Bank increases the Reserve Ratio from 20% to 25% and the total primary deposits stand at Rs. 1,000. Explain the effect of rise in Reserve Ratio on credit creation by commercial banks.

Money Supply and DemandStudy Simplify SpecialPYQ1MCQ
Question 9

Identify the incorrect feature(s) of the Money Supply in an economy, from the following : (i) It is measured during a period of time. (ii) It includes stock of money held by the government of a nation. (iii) It always represents the currency held with Central Bank of the Nation.

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