Currency deposit ratio equals _________________. • The Currency Depos
Right Answer is: C
• The Currency Deposit Ratio: it is the ratio of money held by public in Currency to money held by them in bank deposits.
• CDR= CU/DD, where CU-Currency in Circulation, DD- Demand Deposit.
• It reflects people’s preference for liquidity which is a purely behavioural parameter.
• For example, CDR increases during the festive season as people convert their
Bank deposits into cash for meeting extra expenditure of festival.