Question

How central bank control money supply....briefly explain its two method....6 marks question​

Answer 1

Answer:

RBI controls the money supply from cheques and demand drafts

Answer 2

Answer:control of money supply and credit..

There are two methods-

1)Quantitative-it includes the following-

a)Bank rate policy

b)open market operations

c) Cash reserve ratio

d) By varying the SLR

2.Qualitative methods-

a)Regulation of margin requirements

b)Selective credit control.

c)Direct action

Explanation:For 6 marks please explain the points