Question

how does central bank exercise control over credit in a country?​

Answer 1

Answer:

Under this system the Central Bank controls credit by changing the Cash Reserves Ratio. ... So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank. This activity of the Central Bank will force the Commercial Banks to curtail the creation of credit in the economy.

Explanation:

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Answer 2

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here is the answer.......

Under this system the Central Bank controls credit by changing the Cash Reserves Ratio. ... So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank. This activity of the Central Bank will force the Commercial Banks to curtail the creation of credit in the economy.

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