Calculate the legal reserve requirements initial deposit of Rs- 200 crores lead to creation of total deposits off Rs- 1-600 crores-

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Toppr Admin · Accepted Answer

Total deposits -1-600 crores- Initial deposit -Rs-200 croresMoney Multiplier -TotalDepositsInitialDeposits-1-600200-8We also know- Money Multiplier -1LRRIt means- 8-1LRR-Or- LRR-0-125 or 12-5-

Calculate the legal reserve requirements if initial deposit of $R s . 200$ crores lead to creation of total deposits off $R s . 1, 600$ crores.

Total deposits $= 1, 600$ crores; Initial deposit $= R s . 200$ crores
Money Multiplier $= \frac{T o t a l D e p o s i t s}{I n i t i a l D e p o s i t s} = \frac{1, 600}{200} = 8$
We also know: Money Multiplier $= \frac{1}{L R R}$
It means, $8 = \frac{1}{L R R}$ .
Or, $L R R = 0.125$ or $12.5$ .

Calculate the legal reserve requirements if initial deposit of Rs.200 crores lead to creation of total deposits off Rs.1,600 crores.

Total deposits =1,600 crores; Initial deposit =Rs.200 croresMoney Multiplier =TotalDepositsInitialDeposits=1,600200=8We also know: Money Multiplier =1LRRIt means, 8=1LRR.Or, LRR=0.125 or 12.5.

Calculate the legal reserve requirements if initial deposit of $R s . 200$ crores lead to creation of total deposits off $R s . 1, 600$ crores.

Total deposits $= 1, 600$ crores; Initial deposit $= R s . 200$ crores
Money Multiplier $= \frac{T o t a l D e p o s i t s}{I n i t i a l D e p o s i t s} = \frac{1, 600}{200} = 8$
We also know: Money Multiplier $= \frac{1}{L R R}$
It means, $8 = \frac{1}{L R R}$ .
Or, $L R R = 0.125$ or $12.5$ .