1. To enable the Central Bank to control the amount of advances the banks can create |
2. To make the people deposits with banks safe and liquid |
3. To prevent the commercial banks from making excessive profits |
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements |
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, 3 and 4
Correct Answer: B
Solution :
Because Reserve Requirements are designed as ?precautionary measures? and not to stop banks from ?excessive? profit. This eliminates [c] and [d].You need to login to perform this action.
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