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प्रश्न
During deflation, the Central Bank usually ______.
विकल्प
Increases CRR
Increases SLR
Increases bank rate
Increases buying Government Securities
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उत्तर
During deflation, the Central Bank usually increases buying Government Securities.
Explanation:
During deflation, the central bank works to raise the money supply in the economy, hence increasing the demand for products. This is only conceivable if Increases buying Government Securities is chosen, which involves increasing the money supply by purchasing government assets on the market.
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संबंधित प्रश्न
Define bank rate.
Which of the following is not a quantitative method of credit control?
In order to encourage investment in the economy, the central bank may ______.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Increase in cash reserve ratio adversely affects the capacity of commercial banks to create credit.
Reason (R): An increase in cash reserve ratio reduces the excess reserves of commercial banks and hence limits their credit creating power.
Differentiate between quantitative and qualitative methods of credit control.
Briefly explain the following credit control methods adopted by the Central Bank.
Moral persuasion
Central bank is the lender of the last resort. Explain.
What is this policy called that controls the credit supply in an economy?
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
Define moral persuasion.
