Option 4: (C), (B), (D), (A) -> The money multiplier process begins with statement (C) where the bank receives an initial deposit of Rs 100 and must maintain a 20% reserve requirement (Rs 20), leaving Rs 80 available for lending (B). The bank then lends 50% of this lending amount (Rs 40) to Sonia (D). When Sonia deposits this Rs 40 back into the banking system, it adds to the original Rs 100, resulting in total deposits of Rs 140 (A). This sequence demonstrates the expansion of money supply through the fractional reserve banking system. -> correct
Arrange the following statements related to money multiplier process in correct sequence. (A) The bank has Rs 140 as deposits. (B) The bank has Rs 80…
CUET UG 2025 — Economics Macro
2025mcqmedium
Arrange the following statements related to money multiplier process in correct sequence.
(A) The bank has Rs 140 as deposits.
(B) The bank has Rs 80 to lend.
(C) A bank has a initial deposits of Rs 100 and needs to keep reserves as 20 per cent.
(D) The bank lends 50% of lending amount to Sonia.
Choose the correct answer from the options given below:
Official previous-year question
Held on 22 May 2025 · Verified 13 Jul 2026.
Options
- A
(A), (B), (C), (D)
- B
(A), (C), (B), (D)
- C
(B), (A), (D), (C)
- D
(C), (B), (D), (A)
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