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.

- This increases the money supply or credit in the economy.

- This is the correct answer.

- Option 2: Rises

- If the CRR rises, banks must keep a larger portion of their deposits as reserves.

- This reduces the funds available for lending and decreases credit money.

- Option 3: Both a) and b)

- This option is incorrect.

- A change in both directions cannot simultaneously increase credit money.

- Option 4: None of these

- Since option 1 is correct, this option is not relevant.

Submit Error