If the RBI increases the Cash Reserve Ratio (CRR), it will lead to:

CA Foundation · Business Economics · MTP · April 2025
If the RBI increases the Cash Reserve Ratio (CRR), it will lead to:
(A) A. Increase in money supply
(B) B. Decrease in money supply
(C) C. No effect on money supply
(D) D. Increase in inflation

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Decrease in money supply

Topics: Money Market

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