{"id":33263,"date":"2024-04-15T09:14:01","date_gmt":"2024-04-15T09:14:01","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=33263"},"modified":"2024-04-15T09:14:01","modified_gmt":"2024-04-15T09:14:01","slug":"credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/","title":{"rendered":"Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. If the initial deposit (O) is Rs. 1,000 and the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) is 5% and 20%, then the credit creation capacity will be as follows"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 3,000&#8243; option2=&#8221;Rs. 5,000&#8243; option3=&#8221;Rs. 6,000&#8243; option4=&#8221;Rs. 2,000&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. Rs. 3,000.<\/p>\n<p>The credit creation capacity of a bank is the amount of money that a bank can lend out based on a given amount of deposits. It is calculated by multiplying the initial deposit by the money multiplier, which is equal to 1 divided by the sum of the CRR and the SLR. In this case, the money multiplier is 1 \/ (0.05 + 0.2) = 4. Therefore, the credit creation capacity is 1000 * 4 = 3000.<\/p>\n<p>Option B is incorrect because it is the amount of money that the bank can lend out if there is no CRR or SLR. Option C is incorrect because it is the amount of money that the bank can lend out if there is only a CRR. Option D is incorrect because it is the amount of money that the bank can lend out if there is only an SLR.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 3,000&#8243; option2=&#8221;Rs. 5,000&#8243; option3=&#8221;Rs. 6,000&#8243; option4=&#8221;Rs. 2,000&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[699],"tags":[],"class_list":["post-33263","post","type-post","status-publish","format-standard","hentry","category-banking-and-financial-institutions","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. If the initial deposit (O) is Rs. 1,000 and the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) is 5% and 20%, then the credit creation capacity will be as follows<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. If the initial deposit (O) is Rs. 1,000 and the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) is 5% and 20%, then the credit creation capacity will be as follows\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Rs. 3,000&#8243; option2=&#8221;Rs. 5,000&#8243; option3=&#8221;Rs. 6,000&#8243; option4=&#8221;Rs. 2,000&#8243; correct=&#8221;option1&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T09:14:01+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. If the initial deposit (O) is Rs. 1,000 and the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) is 5% and 20%, then the credit creation capacity will be as follows","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/","og_locale":"en_US","og_type":"article","og_title":"Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. If the initial deposit (O) is Rs. 1,000 and the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) is 5% and 20%, then the credit creation capacity will be as follows","og_description":"[amp_mcq option1=&#8221;Rs. 3,000&#8243; option2=&#8221;Rs. 5,000&#8243; option3=&#8221;Rs. 6,000&#8243; option4=&#8221;Rs. 2,000&#8243; correct=&#8221;option1&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T09:14:01+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/","url":"https:\/\/exam.pscnotes.com\/mcq\/credit-creation-capacity-of-a-bank-depends-on-the-cash-reserve-ratio-and-statutory-liquidity-ratio-if-the-initial-deposit-o-is-rs-1000-and-the-cash-reserve-ratio-crr-and-statutory-liquidity-rat\/","name":"Credit creation capacity of a bank depends on the cash reserve ratio and statutory liquidity ratio. 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