Name any two quantitative tools to control credit creation in an economy.
Answers
Answer:
Bank rate & open market operations & variable reserve ratios
Explanation:
Bank rate means & reverse repo rates
Open market operations means sale of securities by rbi to commercial banks
variable reserve ratios means Cash reserve ratio(CRR) & Statutory liquidity ratio(SLR) for banks by rbi
Answer:
Two quantitative tools to control credit creation in an economy are bank rate and repo rate.
Explanation:
Bank rates are the interest rate at which the Central bank provides loans to the commercial banks without any form of collaterals. These loans are given for a short period of time. Central Banks manage their economic activities by managing the bank rates.
The repo rate is when the Central bank lends money to the commercial banks to take care of the fund shortfalls.