The correct answer is A.
The cash reserve ratio (CRR) is the percentage of deposits that banks are required to keep with the Reserve Bank of India (RBI). When the CRR is lowered, banks have more money to lend out, which increases credit creation.
Credit creation is the process by which banks create new money by lending out money that they have deposited. When a bank lends money, it creates a new deposit in the borrower’s account. The borrower can then use this deposit to make purchases, which creates new deposits in other banks. This process can continue indefinitely, as long as banks are willing to lend out money.
The CRR is one of the tools that the RBI uses to control the money supply. By lowering the CRR, the RBI can increase the amount of money that banks have available to lend, which increases credit creation and the money supply.
Option B is incorrect because lowering the CRR increases credit creation, not decreases it.
Option C is incorrect because lowering the CRR does have an impact on credit creation.
Option D is incorrect because lowering the CRR does have an impact on credit creation.