Question

Which of the following statements is/are correct about money supply?

a. An increase in the bank’s demand deposit will result in a decrease in the required cash reserves.
b. The quantity of money supplied in the economy is a flow concept.
c. A decrease in the required reserve ratio will cause an increase in the credit multiplier.

[1] All the statements are correct
[2] Only a
[3] Only c
[4] Only a and c
[5] Only a and b

Answer 1

The statements a and c are correct, statement b is incorrect. So, the answer is [4].