Question

___________ remains unaffected by a cut in CRR.

• A. monetary liabilities of the central bank
• B. liability of commercial banks
• C. interest rates
• D. aggregate demand

Answer 1

The correct option is A monetary liabilities of the central bank

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must keep as reserves with the central bank in the form of cash. It just acts as an additional reserve which the central bank holds by the commercial bank. So if there is any cut in the cash reserve ratio then it does not affect the monetary liability of the central bank.