Accountancy, asked by bijaytarai03, 8 months ago

what is deficient demand? Explain the role of bank rate in removing it?

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Answered by akkaushik32

Answer:

In case of deficient demand, the Central Bank reduces the bank rate to increase the money supply in the economy. Reduction in bank rate increases the credit/money creation capacity of Commercial Bank and also reduces the market rate of interest which encourages people to borrow more.

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