Maharashtra State BoardHSC Arts 12th Board Exam
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Write Short Note On: Central Bank'S Measure of Regulation of Consumer Credit - Economics

Answer in Brief

Write short note on:

Central Bank's measure of regulation of consumer credit 

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Solution

 Consumer credit refers to the credit that is used by the consumers to buy consumer durable goods such as laptops, mobiles, cars etc. An increase in the amount of this credit will lead to an increase in the demand for goods. With the production of goods remaining unchanged, this increase in demand will result in a shortage of goods. Similarly, a decrease in the amount of this credit will result in decrease in the demand for goods, causing supplies to remain unsold. Thus, the Central Bank's measure of regulation of consumer credit is used to regulate the amount of consumer credit that can be granted to ensure that the production or inventories are not affected.

Concept: Central Bank Function - Controller of Credit
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 13 Central Banking
Exercise | Q 2.3 | Page 122
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