Advertisements
Advertisements
Question
Distinguish between 'Qualitative and Quantitative tools' of credit control as may be used by a Central Bank.
Solution
| Basis | Quantitative Tools | Qualitative Tools |
| Definition | Quantitative instruments of monetary policy are the measures that affect the overall supply of money/credit in the economy. | Qualitative instruments of monetary policy, as against the quantitative instruments affect the flow and direction of credit to particular sectors in a positive or negative manner. |
| Tools | Bank rate, Open Market Operations, Cash Reserve Ratio, Statutory Liquidity Ratio are the quantitative tools used to control the credit. | Margin Requirements, Moral Suasion, Selective Credit Control, Direct Action, Rationing of Credit are the qualitative tools used to control the credit. |
APPEARS IN
RELATED QUESTIONS
Explain how open market operations are helpful in controlling credit creation.
Explain how ‘bank rate' is helpful in controlling credit creation?
Explain how 'margin requirements' are helpful in controlling credit creation?
Explain with reasons, whether you agree or disagree with the following statement
Cash reserve ratio is a quantitative measure of credit control.
Central Bank has the sole power of issuing currency notes.
Define or explain the following concept.
Bank Rate.
Define or Explain the Bank Ratev ?
Define or explain the following concepts.
Clearing house
Match the following Group ‘A’ with Group ‘B’ :
|
Group ‘A’ |
Group ‘B’ |
||
| (a) |
Economics | (1) | not steady |
| (b) |
Reward of capital | (2) | 1 April, 1935 |
| (c) |
Value of money | (3) | Social science |
| (d) |
Establishment of Central Bank | (4) | Income from commodity tax |
| (e) | Sales tax | (5) | Natural science |
| (6) | Interest |
||
| (7) | 1 April, 1939 | ||
State whether the following statements are True or False with reason:
Due to clearing house of the Central Bank cash money is saved.
State whether the following statement is TRUE or FALSE.
Credit rationing is quantitative credit control measure of Central bank.
State whether the following statement is TRUE or FALSE.
Regulation of Consumer Credit is a quantitative credit control measure of Central Bank.
Write short note on:
Issuing Directives
Answer the following question:
What are the various measures of qualitative credit control?
Answer the following question.
Discuss two qualitative methods of credit control.
Answer the following question.
Explain the "varying reserve requirements" method of credit control by the central bank.
Differentiate between Cash Credit and Outright Loans.
