Advertisements
Advertisements
Question
What is the credit supply policy in an economy called?
Advertisements
Solution
- Monetary policy refers to the policy that manages an economy’s credit supply.
- The central bank uses this policy to regulate the money supply, limit inflation, stabilize the currency, and affect interest rates, all of which contribute to economic activity and financial stability.
APPEARS IN
RELATED QUESTIONS
During deflation, the Central Bank usually ______.
Which of the following is not a quantitative method of credit control?
In order to encourage investment in the economy, the central bank may ______.
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 :
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Central bank is the lender of the last resort. Explain.
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Which of the following statements are correct and which are incorrect? Give reasons.
- Central bank is a currency authority.
- Bank rate is a qualitative method of credit control.
- Quantitative methods regulate direction of credit.
- Bank rate is the rate at which commercial banks give loans to the public.
- Central bank should sell government securities when credit is to be expanded.
What are quantitative methods of credit control?
Define moral persuasion.
