(a) to reduce it by Rs. 1,00,000
(b) to increase it by Rs. 1,00,000
(c) to increase it by more than Rs. 1,00,000
(d) to leave it unchanged
Answer: d
Explanation:
Money Supply = CU+DD
CU = Currency with public
DD = Demand Deposits
In the above case if 1 lakh is withdrawn, demand deposit will reduce by 1 lakh and currency held by public will increase by 1 lakh. So there won’t be any immediate change in the money supply in the economy.
Hence, option d is correct.
Read: Solved Economy PYQs With Explanation 2020 UPSC Prelims