Economy, asked by anamikatiwari1577, 3 months ago

explian the role of bank rate in controlling exess demand

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Answered by rt0364622

1

Answer:

During excess demand,central bank increase the bank rate which raises the cost of borrowings from the bank central bank.it forces the commercial banks to increase their lending rates which discourages borrowers from taking loans.It reduces the availability of credit in the economy and helps to correct exess demand

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