--%>

How Bank rates control the credit

How Bank rates control the credit?

Answer: Bank rate is the rate of interest at which the Central bank lends to Commercial banks. By increasing the bank rate central bank increases the cost of borrowing. It forces the Commercial banks to increase in turn the rate of interest from public. Since lending rate increases, demand for loan for investment and other aims fall.

   Related Questions in Macroeconomics

  • Q : What is substitutes Substitutes : The

    Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.

  • Q : Why businessmen prefer current bank

    Describe why businessmen mostly wish to open current account in bank?

  • Q : Calculating National Income Let suppose

    Let suppose NDPFC is Rs. 1,000 crores, and NFA is Rs. (--) 5crores, then what will be national income (NNPFC)? Answer: NNPFC = NDPFC+NFA = 1000 + (-5) = Rs. 995 crores.

  • Q : Fiscal and monetary policies in

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

  • Q : Difference between

    Elucidate the differences among the frictional, structural, and cyclical forms of unemployment.

  • Q : POSSIBILITIES Possibilities Food

    Possibilities Food (millions of tons per year) Tractors (millions per year) A 0 30 B 4 28 C 8 24 D 12 20 E 16 14 F 20 8 G 24 0 a. Is it possible for this nation to produce thirty million tons of food per year? Why or why not. b. Is it possible for this nation to produce thirty million

  • Q : From where Washington bureaucrats

    Can someone please help me in finding out the accurate answer from the following question. Typical Washington bureaucrats derive the maximum consumer surplus from: (1) Publicity in the Senate hearings. (2) Consuming the water. (3) Writing complex regulation. (4) Eatin

  • Q : Help If the price of K declines, the

    If the price of K declines, the demand curve for the complementary project J will:

  • Q : Main concerns of microeconomics Can

    Can someone explain/help me with best solution about problem of microeconomics in economic... Main concerns of microeconomics would consist of: (w) rates of inflation. (x) consumer options. (y) rates of unemploymen

  • Q : Profit sharing plan For the firm, the

    For the firm, the major goal of profit sharing plans is to: