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Questions › CUET-PG › CUET-PG 2024 › Q26
4 marks, −1Macroeconomics › Money supply and the banking multiplier › Banking and credit creationEasyabout 1 min

CUET-PG 2024 Question 26: Money supply and the banking multiplier

What does a bank do if there are no excess reserves?

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Answer and worked solution

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Money supply and the banking multiplier has come up 74 times in 7 exams since 2005.

What this question tests

This question is on Banking and credit creation, part of Money supply and the banking multiplier in Macroeconomics.

How fractional-reserve banks create deposits and what limits them.

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Question from the CUET-PG 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.