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Bank Rate and Repo Rate

If all the ba...

Question

If all the banks in an economy are nationalized and converted into monopoly banks , the total deposits ______________.

A

will decrease

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B

will increase

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C

Neither increase nor decrease

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D

None of the above

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Solution

The correct option is A will decrease
Because the created bank will function in monopoly and will try giving no impetus to increase the savings done by the depositors.

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