Advertisements
Advertisements
प्रश्न
During inflation, the central bank usually:
पर्याय
Decreases bank rate
Decreases cash reserve ratio
Increases bank rate
Buys government securities
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
The rate of which commercial banks borrow from the Central Bank is the:
During deflation, the Central Bank usually ______.
______ is a quantitative method of credit control.
The process of buying and selling of securities by the central bank of a country 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 |
Briefly explain the following credit control method adopted by the Central Bank.
Publicity
Briefly explain the following credit control methods adopted by the Central Bank.
Moral persuasion
Who 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.
What are quantitative methods of credit control?
