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प्रश्न
During inflation, the central bank usually:
विकल्प
Decreases bank rate
Decreases cash reserve ratio
Increases bank rate
Buys government securities
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उत्तर
Increases bank rate
Explanation:
During inflation, the central bank normally raises the bank rate. This makes borrowing more expensive for commercial banks, resulting in higher interest rates for individuals and companies. The greater cost of borrowing reduces the economy's money supply, which helps to keep inflation under control.
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संबंधित प्रश्न
Which of the following is a selective/qualitative method of credit control?
The difference between the value of security and the amount of loan sanctioned against these securities is known as:
The process of buying and selling of securities by the central bank of a country is known as ______.
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.
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Differentiate between quantitative and qualitative methods of credit control.
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
What do you mean by credit control?
What is meant by Legal Reserve Ratio?
Define moral persuasion.
