AshikaKnowledge Contributor
If the total deposits created by commercial banks are ₹. 12,000 and the LRR is 25%, calculate the initial deposit.
If the total deposits created by commercial banks are ₹. 12,000 and the LRR is 25%, calculate the initial deposit.
Money multiplier = 1/LRR = 1/0.25 = 4
Initial deposit = Total deposit/Money Multiplier
= 12,000/4
= ₹3,000