If the credit multiplier is 4, calculate the required reserve ratio.

CA Foundation · Business Economics · PYQS · May 2026
If the credit multiplier is 4, calculate the required reserve ratio.
(A) A. 40%
(B) B. 25%
(C) C. 20%
(D) D. 60%

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. 25%

Topics: Money Market

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