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Determinants of Money Supply

refers to tha...

Question

______ refers to that portion of total deposits of a commercial bank which it has to keep with itself in the form of liquid assets.

A

Cash Reserve Ratio

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B

Statutory Liquidity Ratio

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C

Bank Rate

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D

Repo Rate

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Solution

The correct option is B Statutory Liquidity Ratio
Statutory Liquidity Ratio refers to the proportion of deposits the commercial bank is required to maintain with them in the form of liquid assets in addition to the cash reserve ratio.

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