3646EconomicsMedium
Suppose all banks maintain a 100 percent reserve ratio. If an individual deposits Rs 1,000 of currency in a bank?
AThe money supply is unaffected
Bthe money supply decrease by less than Rs 1,000
Cthe money supply increase by less than Rs 1,000
Dthe money supply decrease by more than Rs 1,000
Ethe money supply increases by more than Rs 1,000
Correct answer
A. The money supply is unaffected
Explanation
The correct answer is The money supply is unaffected.