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Which of the following is/are likely to be associated with the increase in the Money Multiplier in the economy?
Decrease in the Reserve Ratio of the banks.
  • Increase in the Currency Deposit Ratio (CDR).
  • Increase in the Reverse Repo Deposits with the RBI.
    Select the correct answer using the code given below:
    • a)
      1 only
    • b)
      1 and 2 only
    • c)
      1 and 3 only
    • d)
      1, 2 and 3
    Correct answer is option 'A'. Can you explain this answer?
    Most Upvoted Answer
    Which of the following is/are likely to be associated with the increa...
    The Money Multiplier in an economy is dependent on the following factors:
    • Reserve Ratio: The Money Multiplier is inversely proportional to the Reserve Ratio. Lower the Reserve Ratio, higher the Money Multiplier.
    • Currency Deposit Ratio: It is calculated as the ratio of currency with the public to the deposits with the banks.
    • Increase in currency with the public, accompanied by decrease in deposits with the banks, would lead to increase in the Currency Deposit Ratio.
    • Similarly, decrease in currency with the public, accompanied by increase in deposits with the banks, would lead to decrease in the Currency Deposit Ratio.
    • The Money Multiplier is inversely proportional to the Currency Deposit Ratio. Lower the Currency Deposit Ratio, higher the Money Multiplier. Reverse Repo: Increase in the Reverse Repo deposits with the RBI would mean that the banks would have less amount of money to give loans. Hence, increase in the Reverse Repo would lead to decrease in the Money Multiplier.
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    Which of the following is/are likely to be associated with the increase in the Money Multiplier in the economy? Decrease in the Reserve Ratio of the banks. Increase in the Currency Deposit Ratio (CDR). Increase in the Reverse Repo Deposits with the RBI. Select the correct answer using the code given below:a)1 onlyb)1 and 2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?
    Question Description
    Which of the following is/are likely to be associated with the increase in the Money Multiplier in the economy? Decrease in the Reserve Ratio of the banks. Increase in the Currency Deposit Ratio (CDR). Increase in the Reverse Repo Deposits with the RBI. Select the correct answer using the code given below:a)1 onlyb)1 and 2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following is/are likely to be associated with the increase in the Money Multiplier in the economy? Decrease in the Reserve Ratio of the banks. Increase in the Currency Deposit Ratio (CDR). Increase in the Reverse Repo Deposits with the RBI. Select the correct answer using the code given below:a)1 onlyb)1 and 2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is/are likely to be associated with the increase in the Money Multiplier in the economy? Decrease in the Reserve Ratio of the banks. Increase in the Currency Deposit Ratio (CDR). Increase in the Reverse Repo Deposits with the RBI. Select the correct answer using the code given below:a)1 onlyb)1 and 2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?.
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