Credit money is increased when CRR ........

Credit money is increased when CRR:

Falls

Rises

Both (a) and (b)

None of these

- Option 1: Falls

When the Cash Reserve Ratio (CRR) falls, banks have more funds available to lend, thereby increasing the creation of credit money.

- Option 2: Rises

When the CRR rises, banks need to keep more funds with the central bank, reducing the amount available for lending and decreasing credit money.

- Option 3: Both (a) and (b)

Only one situation (falling CRR) increases credit, so this option is incorrect.

- Option 4: None of these

This option is incorrect since a falling CRR does lead to increased credit money.

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