> What is the relation between growth rate and crr?

What is the relation between growth rate and crr?

Posted at: 2014-12-05 
what is the relation between the growth rate and cash reserve ratio of the central bank???

plz help me!!

if the crr is kept low then the flow of money will be more in the economy and this will increase the amount of expenses by people of the nation. so as there is an increase in expense it effects the revenue of firms and government....so more income increase in standard of living,education,etc...which is an sign of growth rate in economy.

But The another sign of coin...if there is more foreign investment in the economy and the people buy that product than its an loss for the government revenue.

crr is that rate ,which every bank has to deposit in RBI,so in high crr ,money in the hand of any bank become lower so they can't lending to producer as per their wants and producers face loss that lead to low growth for economy .And low GDP,but this low crr help to control inflation ,high inflation also make bottleneck in supply side.

what is the relation between the growth rate and cash reserve ratio of the central bank???

plz help me!!