--%>

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 : Value of total receipts of government

    Determine the value of total receipts of government budget when budget deficit is Rs 2,000 crores and the net expenses is Rs 3,000 crores.

  • Q : Opportunity costs of consumption

    Individuals maximize the satisfaction whenever the marginal utilities of all goods are: (i) Precisely proportional to the consumer’s income. (ii) Maximized. (iii) Precisely proportional to the opportunity costs of consuming them. (iv) Equivalent

  • 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 : Example of microeconomic issue Hey

    Hey friends i need your support for justify the problem that is given below: If the United Auto Workers Union acquires benefit package and a large wage from GM, Ford, and Chrysler which increases the cost of U.S. cars, it is a

  • Q : Project Include graphs and should be 15

    Include graphs and should be 15 pages long

  • Q : Define the term Supply curve Define the

    Define the term Supply curve.

  • Q : Define Devaluation Devaluation means

    Devaluation means decrease in the external value of a country’s currency as an aware policy measure adopted by the Government of a country. In another words, we make our currency less costly in terms of foreign currency. This builds our goods ch

  • Q : Concept of deflationary gap Elucidate

    Elucidate the concept of deflationary gap. Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium

  • Q : Economic growth model Explain the main

    Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?

  • Q : Another name of macroeconomics What is

    What is another name of macroeconomics? Answer: Income theory