When does a decrease in the supply of Money occur?

11. When does a decrease in the supply of Money occur?

  1. Increase in Cash Reserve Ratio
  2. Decrease in Cash Reserve Ratio
  3. Inflation
  4. Increase in Cash Flow

Answer: A) Increase in Cash Reserve Ratio

Explanation:

At the point when RBI expands the CRR, fewer assets are accessible with banks as they need to keep bigger bits of their money close by with RBI. In this way climb in CRR prompts an expansion of financing costs on credits given by the Banks. A decrease in CRR drains cash out of the framework causing a reduction in the cash supply.

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