The effect of increase CRR will be reduced or nullified if:

CA Foundation · Business Economics · MTP · May 2026
The effect of increase CRR will be reduced or nullified if:
(A) A. Bank rate is reduced.
(B) B. Securities are sold in the open market.
(C) C. SLR is increased.
(D) D. People do not borrow from non-banking institutions.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Bank rate is reduced.

Topics: Money Market

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