In an economy, a change in the reserve ratio will directly affect the:

CA Foundation · Business Economics · MTP · April 2025
In an economy, a change in the reserve ratio will directly affect the:
(A) A. Level of interest rates in the market
(B) B. Supply of money in circulation
(C) C. Demand for money at different income levels
(D) D. Government's budgetary balance

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Supply of money in circulation

Topics: Money Market

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