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Ratios and OMO

Cash Reserve ...

Question

Cash Reserve Ratio increases the cash for ____.

A

All of the above

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B

Lending

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C

Borrowing

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D

Mortgaging

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Solution

The correct option is B
Lending

Cash Reserve Ratio increases the cash for lending.

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Similar questions

Q. Read the following statements carefully and choose the correct answer from the following:
Statement 1 - A change in Cash Reserve Ratio affects the power of commercial banks to create credit.
Statement 2 - An increase in Cash Reserve Ratio increases the excess reserves of commercial banks and limits their lending power.

[0.80 marks]

Q. Give reason or explain:
The Cash Reserve Ratio affects the lending capacity of the banks.

Q. Give Reasons or Explain the following:
The cash reserve ratio affects the lending capacity of the banks.

Q. Consider the following statements:
1) During inflation, RBI increases the Cash Reserve Ratio.
2) During deflation, RBI increases the cash Reserve Ratio.
Which of the statements given above is/are correct?

What will happen if the RBI increases the Cash Reserve Ratio?

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