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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
Define bank rate.
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:
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 :
Give any two reasons as to why a country needs a central bank.
Define the following term:
Margin Requirements.
Briefly explain the following credit control methods adopted by the Central Bank.
Moral persuasion
Identify the following Credit Control measure undertaken by the Central Bank during inflation.
The Central Bank sells government approved securities to the public.
Give an example of margin requirements.
Describe two quantitative credit control measures of the Central Bank.
