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Question
______ is a quantitative method of credit control.
Options
Bank rate
Cash reserve ratio
Credit rationing
Both Bank rate and Cash reserve ratio
Solution
Both Bank rate and Cash reserve ratio is a quantitative method of credit control.
Explanation:
The Bank Rate and the Cash Reserve Ratio (CRR) are quantitative methods of credit control used by the central bank to regulate the total money supply in the economy.
RELATED QUESTIONS
Define bank rate.
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Reason (R): An increase in cash reserve ratio reduces the excess reserves of commercial banks and hence limits their credit creating power.
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Describe two quantitative credit control measures of the Central Bank.
