Ayushi posted an Question
July 03, 2020 • 05:15 am 30 points
  • UGC NET
  • Economics

60. under a fractional reserve banking syatem , banks are required to (1 keep part of their demand deposits as reserves (2) expand morney supply when requested

60. Under a fractional reserve banking syatem , bankS are required to (1 Keep part of their demand deposits as reserves (2) Expand morney supply when requested by the Central Bank (3) (4) None of the above Keep the volume of credit conatant () (3) 14) 61. The classical economists argned that involuntary unemployment would e ellminated by: (1) Increaie in aggregate spending (2) (3) Sclf correcting market forces (4) Reduction in corporate income tax Increasc in supply of money PLEASE TELL ME THESE QUESTIONS.

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  • Harini best-answer

    60. the correct option is a. fractional banking system is the popular method of banking followed all over the world. under which the banks collect loans and give credits to the borrowers. it can do this action only when it holds certain percent of its deposits liabilities as reserves. 61. the correct option is c. as the classical economist always argued in favour of closed market economy. Under closed market economy there is no possibility for any distraction or injection in the economy. So the classical argued that when market forces were allowed to function. the demand and supply will always correct themselves therefore there will be no unused resources. that says that there will be no unemployment. it is the important assumption of classical economist.

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