RBI can influence money supply by changing the ____ at which it gives loans to commercial banks for long period.

Ans – (c)

Explanation:-

Bank Rate:- The bank rate is the rate at which the central bank of a country lends money to commercial banks to meet their long-term needs.

RBI uses bank rate to control credit and it has the same effect as that of Repo Rate, i.e. an increase in bank rate increases the cost of borrowings from the central bank, which leads to an increase in lending rates by commercial banks. It discourages borrowers from taking loans, which reduces the ability of commercial banks to create credit.

Additional Information:-

Bank Rate is also known as Discount Rate.