ECON 201 Saudi Electronic University Deposits in Saudi Arabia Report
Question Description
I’m working on a management discussion question and need support to help me understand better.
Hi I need you to rewrite this in another way
As Saudi Arabia reserve ratio is 7% then these percentage of deposits are not available to give loans. Due to this less amount of loans are given to people and may results in less investment in country.
Advantages:
Due to higher reserve ratio cash run out problem will least likely to occur and reduces the risk of bank failing. It also helps in preventing collapsing of economy by controlled lending to people.
Disadvantages:
It prevents the full utilization of available savings of people in an economy as banks cannot use the required reserves.This slows down the process of money credit creation
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