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What will be the effect of a fall in CRR on money supply? What will be the effect of a rise in SLR on money supply ? What will be the effect of a rise in bank rate on money supply? |
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Answer» (i) With a fall in CRR, the availability of credit increases and as a result the supply of money increases. (ii) With a rise in SLR, the availability of credit decreases and as a result the supply of money decreases. (iii) With a rise in bank rate, the availability of credit decreases and as a result the supply of money decreases. |
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