The basic purpose of imposing legal reserve requirements on commercial bank is to?

The basic purpose of imposing legal reserve requirements on commercial bank is to?
  • A.
    assure the profitability of commercial banks
  • B.
    provide a device through which credit creation by banks can be controlled
  • C.
    provide a proper ratio between earning and non-earning bank assets
  • D.
    provide the Central Bank with working capital
Correct Answer: Option B
Explanation
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