Economics · Banking and Monetary Policy
When the Cash Reserve Ratio (CRR) is increased by the central bank, how does it typically affect the credit creation capacity of commercial banks?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It fluctuates unpredictably
- 2It remains completely stable
- 3It decreases significantly✓
- 4It increases significantly
Correct answer
It decreases significantly
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