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The entire question is in the below screenshot 2. The questions 2(a), 2(b) and 2(c) are based on the situation described below. Suppose that the

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2. The questions 2(a), 2(b) and 2(c) are based on the situation described below. Suppose that the retail inflation in India continues to move downward from the current 5.4 to 5.00 percent by end of 2015-16, due to which the central bank (RBI) decides that it is prudent to scale down reserve requirements for commercial banks in order to ease credit conditions and achieve GDP growth target. In effect, it slashed the cash reserve ratio (CRR), the ratio of commercial bank reserves (in the accounts at the central bank) to the total deposits, by 25 basis points from the prevailing 4.00 percent with immediate effect. Suppose also that RBI does not change the monetary base (MO) and that no additional money pumped into the system is held with commercial banks. a) If the stock of broad money supply (M3) and the outstanding deposits of scheduled commercial banks are to the tune of $100502 billion and

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