Advertisements
Advertisements
Question
What is meant by Legal Reserve Ratio?
Solution
- Legal Reserve Ratio (LRR) is the minimum ratio of deposits, legally required to be kept as cash reserves.
- The LRR is fixed by the Central Bank.
RELATED QUESTIONS
In order to encourage investment in the economy, the central bank may ______.
Bank rate is the rate at which:
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Bank rate is a quantitative instrument of monetary policy.
Reason (R): During inflation, RBI reduces the bank rate.
Define the following term:
Open Market Operations.
Differentiate between quantitative and qualitative methods of credit control.
Define the following term:
Cash Reserve Ratio.
Central bank is the lender of the last resort. Explain.
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Which of the following statements are correct and which are incorrect? Give reasons.
- Central bank is a currency authority.
- Bank rate is a qualitative method of credit control.
- Quantitative methods regulate direction of credit.
- Bank rate is the rate at which commercial banks give loans to the public.
- Central bank should sell government securities when credit is to be expanded.
Who controls the credit supply in an economy?
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
What do you mean by credit control?
Which are qualitative methods of credit control?
Define moral persuasion.
Give an example of margin requirements.
