Home/process
- Recent Questions
- Most Answered
- Answers
- No Answers
- Most Visited
- Most Voted
- Random
- Bump Question
- New Questions
- Sticky Questions
- Polls
- Followed Questions
- Favorite Questions
- Recent Questions With Time
- Most Answered With Time
- Answers With Time
- No Answers With Time
- Most Visited With Time
- Most Voted With Time
- Random With Time
- Bump Question With Time
- New Questions With Time
- Sticky Questions With Time
- Polls With Time
- Followed Questions With Time
- Favorite Questions With Time
Credit Creation : Meaning & Process of Credit Creation by Commercial Banks in India
Credit creation is the process by commercial banks to increase the money supply of a country or monetary region. In most modern economics, most of the money supply is in the form of bank deposits. So credit creation is also known as ‘Deposit Creation.’ Commercial banks create credit by advancing loaRead more
Credit creation is the process by commercial banks to increase the money supply of a country or monetary region. In most modern economics, most of the money supply is in the form of bank deposits. So credit creation is also known as ‘Deposit Creation.’
Commercial banks create credit by advancing loans and purchasing securities. Banks use public deposits to lend money to businesses or individuals. It doesn’t mean they simply lend the money which they deposit. Banks use a method which is called fractional reserve banking. Where they use a portion of the deposit to provide loans with high interest rates.
Basic concepts of credit creation:-
Now let’s understand the process by the Example:–
Assume, A person deposits Rs.10,000 in Bank ‘A’. As required the banks keep LRR 20% of the deposit of Rs. 2000 and Then Bank ‘A’ lends the remaining amount to Bank ‘B’ (10,000-2,000 = Rs.8,000)
Again, Bank ‘B’ keeps LRR 20% of Rs.8,000 means Rs.1,600 then lends the remaining amount to any business. (8,000- – 1,600 = Rs.6,400)
The money goes on multiplying in this way this process continues till new deposits become nil.
Ultimately, Total money creation = INITIAL DEPOSIT * 1/LRR%
10,000 * 1/20% = Rs. 50,000
See lessExplain process states with a suitable diagram
A process is like a task that a computer is executing. It may be in different states depending on what it is doing. The following are the main process states: New :Process has just been created. Ready: Process is ready to run but waiting for CPU to get free. Running: Process is being executed by CPURead more
A process is like a task that a computer is executing. It may be in different states depending on what it is doing. The following are the main process states:
New :Process has just been created.
Ready: Process is ready to run but waiting for CPU to get free.
Running: Process is being executed by CPU now.
Waiting: Process waits for some event (for example, waiting for user input or for a file to be read).
Terminated: This means that the process has completed execution and has died.From New to Ready: Here, we have set our process up and it’s ready to execute.
From Ready to Running: While running, the CPU chooses this process of all other processes that are available at that time
From Running to Waiting: In order for the processor or any of its resources not to go idle when running the program, it should pause until an event occurs such as an input clause
From Waiting to Ready: The state which follows after waiting can only happen if some events occur otherwise it will remain constant.
From Running to Terminated: The task has been accomplished by this process
See lessExplain process states with a suitable diagram
New: Description: The process is being created. In this state, the operating system is setting up the process control block (PCB), memory allocation, and other necessary resources. Example: When you start a new application, it begins in the new state while the OS sets up its environment. ReadRead more
- New:
- Description: The process is being created. In this state, the operating system is setting up the process control block (PCB), memory allocation, and other necessary resources.
- Example: When you start a new application, it begins in the new state while the OS sets up its environment.
- Ready:
- Description: The process is prepared to run but is waiting for CPU allocation. It has all the resources it needs except the CPU.
- Example: Multiple processes might be in the ready state, waiting their turn to be executed by the CPU.
- Running:
- Description: The process is currently being executed by the CPU. At this moment, the CPU is actively working on the instructions of this process.
- Example: When the CPU starts executing the instructions of a text editor, the text editor process is in the running state.
- Waiting (or Blocked):
- Description: The process cannot continue executing until some external event occurs (such as an I/O operation completion). It is not ready to use the CPU until this event is resolved.
- Example: If a process needs to read data from a disk, it will move to the waiting state until the disk I/O operation is completed.
- Terminated (or Exit):
- Description: The process has finished its execution. This state means that the process has completed its task and is being removed from the process table.
- Example:When you close an application, the process goes into the terminated state after finishing its execution and cleanup activitie
See lessExplain process states with a suitable diagram
Process States Explanation: In operating systems, a process is a program in execution. As a process runs, it goes through different states. These states represent the current condition of the process in the system. Let's break down the main process states: 1. New: The process is being created. 2. ReRead more
Process States Explanation:
In operating systems, a process is a program in execution. As a process runs, it goes through different states. These states represent the current condition of the process in the system. Let’s break down the main process states:
1. New: The process is being created.
2. Ready: The process is waiting to be assigned to a processor.
3. Running: The process is currently executing on the processor.
4. Waiting (or Blocked): The process is waiting for some event to occur (like I/O completion).
5. Terminated: The process has finished execution.
Examples:
1. New: When you double-click on an application icon, the operating system creates a new process.
2. Ready: Multiple programs open on your computer, waiting for their turn to use the CPU.
3. Running: The video game you’re currently playing.
4. Waiting: When you click “Save” in a document and wait for it to complete.
5. Terminated: When you close an application, and it finishes its execution.
Now, let’s visualize these states with a diagram:
Explanation of the diagram:
1. A new process starts in the “New” state.
2. It then moves to the “Ready” state, waiting for the CPU.
3. When the scheduler selects it, it goes to the “Running” state.
4. From “Running,” it can:
a) Go back to “Ready” if its time slice expires.
b) Move to “Waiting” if it needs to wait for a resource or event.
c) Proceed to “Terminated” if it completes execution.
5. From “Waiting,” it returns to “Ready” when the waited-for event occurs.
This cycle continues until the process terminates.
See lessExplain process states with a suitable diagram
Process States Explanation: In operating systems, a process is a program in execution. As a process runs, it goes through different states. These states represent the current condition of the process in the system. Let's break down the main process states: 1. New: The process is being created. 2. ReRead more
Process States Explanation:
In operating systems, a process is a program in execution. As a process runs, it goes through different states. These states represent the current condition of the process in the system. Let’s break down the main process states:
1. New: The process is being created.
2. Ready: The process is waiting to be assigned to a processor.
3. Running: The process is currently executing on the processor.
4. Waiting (or Blocked): The process is waiting for some event to occur (like I/O completion).
5. Terminated: The process has finished execution.
Examples:
1. New: When you double-click on an application icon, the operating system creates a new process.
2. Ready: Multiple programs open on your computer, waiting for their turn to use the CPU.
3. Running: The video game you’re currently playing.
4. Waiting: When you click “Save” in a document and wait for it to complete.
5. Terminated: When you close an application, and it finishes its execution.
Now, let’s visualize these states with a diagram:
Explanation of the diagram:
1. A new process starts in the “New” state.
2. It then moves to the “Ready” state, waiting for the CPU.
3. When the scheduler selects it, it goes to the “Running” state.
4. From “Running,” it can:
a) Go back to “Ready” if its time slice expires.
b) Move to “Waiting” if it needs to wait for a resource or event.
c) Proceed to “Terminated” if it completes execution.
5. From “Waiting,” it returns to “Ready” when the waited-for event occurs.
This cycle continues until the process terminates.
See less