Question

Calculate the value of money multiplier and total deposit created if initial deposit is of $500$ crore and LRR is $10$.

Answer 1

Given, LRR is $10$ or $0.1$
Money Multiplier $=\frac{1}{LRR}=\frac{1}{0.1}=10$
If initial deposit is of $500$ crores, then:
Total Deposit $=$ Initial Deposit $\times$ Money Multiplier $=500\times 10=Rs.5,000$ crores.