Credit Control means:
Credit Control means:
(a) Contraction of Money Supply only
(b) Expansion of Money Supply only
(c) Both Contraction & Expansion of Money Supply
(d) No change in Money Supply
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Ans – (c)
Explanation:-
Credit Control means both contraction and expansion of money supply.
Central banks with the help of monetary policy can increase and decrease the credit supply in the economy.
for example:-
An increase in the bank rate would reduce the credit and a decrease in the bank rate would increase it.
apart from the bank rate, there are other measures to such as
1. LRR
2. Open market operation
3. Repo Rate
4. Reverse Repo Rate
5. Margin requirement
etc.
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