--%>

Define bank rate policy

Define bank rate policy? How does it operate as a technique of credit control?

Answer: Bank rate is the rate at which the central bank provides loans to the commercial banks. The increase in bank rate leads to rise in interest of loans. This discourages borrowers from taking loans. This reduces credit creation. The decrease in bank rate will have opposite effect.

   Related Questions in Macroeconomics

  • Q : Consumer Surplus definition Can someone

    Can someone help me in finding out the right answer from the given options. The basic difference between the dollar amounts people would willingly to pay for a particular quantity of a good and the amounts that they do pay at a particular market price is termed as: (1

  • Q : Economic growth model Explain the main

    Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?

  • Q : Market shift when exporting When the

    When the U.S. furniture market is primarily in equilibrium at point e on S0D0 and then Chinese manufacturers start exporting more furniture to the United States, then this market would shift towards a new equilibrium at: (1) point a. (2) point b. (3) point c. (4) poin

  • Q : Shifting of demand curve due to new

    Assume that the launch of Microsoft Xbox 360 moved the demand curve for Sony PlayStation 2 games from D0 to D1 throughout similar period if new game designers enter into this market and hence supplies of PlayStation 2 games shifted S0 to S1. The market equilibrium: (1

  • Q : Money-just another good ‘What occurs in

    ‘What occurs in the money market when there is a raise in income?’

  • Q : FX Rates & The Balance of Payments The

    The Financial Account captures international fund flows due to

  • Q : Components of aggregate demand What are

    What are the components of aggregate demand (AD)? Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer

  • Q : Demand according to range of adjustments

    As longer time periods are taken and a bigger range of adjustments (or substitutions) become obtainable, then demand curves tend to become: (1) flatter, as supply curves become steeper. (2) Steeper as supply curves become flatter. (3) Flatter, and therefore do supply

  • Q : Limitations of using GDP as an index of

    What are the limitations of using GDP as an index of welfare of a country?A) The N.I. figures provide no indication of the population, skill and resource of the country. Thus the levels of welfare stay low.B) A higher N.I. migh

  • Q : Market Supply versus Individual Supply

    What is the basic difference between Market Supply and Individual Supply?