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The variable cash reserve ratio is new method of credit control used by central banks in recent times.
The term variable ratio refers to the minimum reserves with the central bank by the commercial banks. As per section 42 (1) of the reserve bank of India, 1934, every scheduled bank has to maintain a minimum cash balance as reserve to be calculated as a percentage on their time and demand liabilities.
Variable reserve ratio was used as one of the credit control methods. This methods was suggested by keynes in 1930. This method was first introduced by federal Reserve System of USA in 1935.
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What is Reserve requirement ratio?
The Required Reserve Ratio is the percentage/fraction of required reserves that should be held for every dollar of deposits in a depository institution that is required by the Federal Reserve.
What describes how lowering the required reserve ratio reduces the money supply?
When the required reserve ratio is lowered, banks can loan out more money.
What is current cash reserve ratio?
The current cash reserve ratio (CRR) in India set by the RBI is 5% as on 21st august, 2009.
Why is raising the required reserve ratio results in a decrease in the money supply?
When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
What accurately describes how raising the required reserve ratio reduces the money supply?
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
What is variable ratio and variable interval?
different between variable intervals and fixed ratio
Variable gear ratio steering?
what is variable gear ratio steering steering system?
What is ratio variable?
It is the ratio generated by dividing the Variable cost over total Sales/Revenue
Under a fractional reserve banking system the amount of money loaned out can only increase if what happens?
The required reserve ratio is lowered.
Credit reserve ratio?
not sure
How do you calculate reserve ratio?
multiplication
What is Reserve requirement ratio?
The Required Reserve Ratio is the percentage/fraction of required reserves that should be held for every dollar of deposits in a depository institution that is required by the Federal Reserve.
Formula for calculating cash debosit ratio?
cash reserve ratio
What describes how lowering the required reserve ratio reduces the money supply?
When the required reserve ratio is lowered, banks can loan out more money.
What is current cash reserve ratio?
The current cash reserve ratio (CRR) in India set by the RBI is 5% as on 21st august, 2009.
What is a bank's reserve to deposit ratio?
70%
What accurately describes how raising the required reserve reserve ratio reduces the money supply?
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
