Given the required reserve ratio (RRR) is 8% and 12.5% for every 1,00,000 deposited in the banking system, compute the credit multipliers.

CA Foundation · Business Economics · PYQS · January 2026
Given the required reserve ratio (RRR) is 8% and 12.5% for every 1,00,000 deposited in the banking system, compute the credit multipliers.
(A) A. 12.5; 8
(B) B. 8; 12.5
(C) C. 12.5; 10
(D) D. 8; 10

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. 12.5; 8

Topics: Money Market

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