CA Foundation Exam > CA Foundation Questions > In order to control credit:a)CRR should be in...
Start Learning for Free
In order to control credit:
- a)CRR should be increased and Bank rate should be decreased
- b)CRR should be reduced and Bank rate should be reduced
- c)CRR should be increased and Bank rate should be increased
- d)CRR should be reduced and Bank rate should be increased
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
In order to control credit:a)CRR should be increased and Bank rate sho...
Explanation:
Control of Credit:
To control credit in the economy, the Central Bank (such as the Reserve Bank of India) uses two main tools: Cash Reserve Ratio (CRR) and Bank Rate.
CRR and Bank Rate:
- CRR (Cash Reserve Ratio): It is the percentage of deposits that banks are required to keep with the central bank in the form of reserves. By increasing the CRR, the central bank can reduce the amount of money available for lending by commercial banks, thereby controlling credit in the economy.
- Bank Rate: It is the rate at which the central bank lends money to commercial banks. By increasing the Bank Rate, the central bank can make borrowing more expensive for commercial banks, which in turn reduces the amount of credit available in the economy.
Correct Approach:
- CRR should be increased and Bank rate should be increased: By increasing both the CRR and Bank Rate, the central bank can effectively control the amount of credit available in the economy. This dual approach restricts the ability of commercial banks to lend out money and helps in controlling inflation and excess liquidity in the economy.
Therefore, the correct option is 'CRR should be increased and Bank rate should be increased' to control credit effectively in the economy.
Free Test
FREE
| Start Free Test |
Community Answer
In order to control credit:a)CRR should be increased and Bank rate sho...
C
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer?
Question Description
In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer?.
In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer?.
Solutions for In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice In order to control credit:a)CRR should be increased and Bank rate should be decreasedb)CRR should be reduced and Bank rate should be reducedc)CRR should be increased and Bank rate should be increasedd)CRR should be reduced and Bank rate should be increasedCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup