--%>

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 : Problem on law of diminishing marginal

    According to law of diminishing marginal utility, the longer that Lee and Chris kiss: (i) the less invested each will be in ongoing this relationship. (ii) The nearer they are to reaching their joined production possibilities frontier. (iii) The more

  • Q : How banking evolved into the

    Give a short history of how banking evolved into the sophisticated operation. Start first with the Goldsmith and sum up with the Banking system which we experience nowadays.

  • Q : Fiscal Monetary changes With the

    With the general equilibrium framework in place, the stage is now set for introducing fiscal and monetary changes and analysing their effects on the general equilibrium. We will first introduce a fiscal change in the form of increase in deficit-financed expenditure, a

  • Q : Macroec Examples of command economies

    Examples of command economies are: a) the United States and Japan b) Sweden and Norway c) Mexico and Brazil d) Cuba and North Korea

  • Q : Fiscal and monetary policies in

    Explain the impact of changes in fiscal and monetary policies in curtailing inflation?

  • Q : Base of categorizing receipts into

    What is the base of categorizing receipts into revenue and capital receipts?

  • Q : Meaning of Cash Reserve Ratio or CRR

    Meaning of Cash Reserve Ratio (CRR): It is the percentage of net or total deposits of commercial bank that are maintained by RBI.

  • Q : Taxing imports-whats the problem ‘Must

    ‘Must a country which is less proficient at generating all goods use import controls to decrease imports from additional countries?’

  • Q : Problem on full employment level of

    What happens when AD > AS past to full employment level of employment?

  • Q : Agency function of Commercial Bank Name

    Name the six agency function of Commercial Bank. Answer: A) Transfer of funds B) Collection of funds C) Purchase and sale of securities. D) Collection of dividends E) Payment of bills &