Advertisements
Advertisements
प्रश्न
During deflation, the Central Bank usually ______.
विकल्प
Increases CRR
Increases SLR
Increases bank rate
Increases buying Government Securities
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
The difference between the value of security and the amount of loan sanctioned against these securities is known as:
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | A rate of interest at which the central bank (RBI) lends money to member commercial banks to meet they long term needs. | A. | Cash Reserve Ratio |
| (ii) | A rate of interest at which RBI lends money to commercial banks to meet their short term needs. | B. | Statutory liquidity ratio |
| (iii) | A minimum percentage of total deposits kept by banks with the Central Bank. | C. | Repo rate |
| (iv) | A minimum percentage of total deposits to be kept by banks inform of liquid assets with themselves. | D. | Bank rate |
Observe the relationship of the first pair of words and complete the second pair.
Quantitative method of credit control by the central bank : Bank rate.
Quantitative method of credit control by the central bank :
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Bank rate is a quantitative instrument of monetary policy.
Reason (R): During inflation, RBI reduces the bank rate.
What is meant by open market operations?
Differentiate between quantitative and qualitative methods of credit control.
Define the following term:
Cash Reserve Ratio.
Define the following term:
Margin Requirements.
Which are qualitative methods of credit control?
Give an example of margin requirements.
