1. To enable the Central Bank to control the amount of advances the banks can create |
2. To make the people's 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 and (d).You need to login to perform this action.
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