Explain any two measures that reserve bank of india can adopt to decrease money supply
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Heya....
RBI in India has the right to control the money supply in the market...
So to decrease the money supply in the economy RBI can adopt these two measure....
"" Increase in Cash Reserve Ratio....
It is the ratio that the commercial banks have to submit with RBI from its demand deposits ...
If this ratio increase then commercial banks have to submit more money in RBI then ,, their credit creation capicity will reduce that leads to decrease in money supply..
"" Increase in repo rate...
This is the rate at which RBI gives loans to commercial banks ...
If this ratio increase then loans will be became of high value and banks will not take loan and do less credit creation..This decrease the money supply from economy...
-- Be Brainly....
RBI in India has the right to control the money supply in the market...
So to decrease the money supply in the economy RBI can adopt these two measure....
"" Increase in Cash Reserve Ratio....
It is the ratio that the commercial banks have to submit with RBI from its demand deposits ...
If this ratio increase then commercial banks have to submit more money in RBI then ,, their credit creation capicity will reduce that leads to decrease in money supply..
"" Increase in repo rate...
This is the rate at which RBI gives loans to commercial banks ...
If this ratio increase then loans will be became of high value and banks will not take loan and do less credit creation..This decrease the money supply from economy...
-- Be Brainly....
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