The quantitative measures by the Central Bank are also known asa)quali...
Correct Answer :- a,d
Explanation : The methods used by the central bank to regulate the flows of credit into particular directions of the economy are called qualitative or selective methods of credit control. Unlike the quantitative methods, which affect the total volume of credit, the qualitative methods affect the types of credit, extended by the commercial banks; they affect the composition rather than the size of credit in the economy.
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The quantitative measures by the Central Bank are also known asa)quali...
Quantitative Measures by the Central Bank
Quantitative measures refer to the monetary policy tools that are employed by the central bank to regulate the supply of money in the economy. These measures are aimed at controlling inflation, stabilizing the exchange rate, and promoting economic growth. The quantitative measures by the central bank are also known as general measures.
Explanation of Options
a) Qualitative measures: Qualitative measures are actions taken by the central bank to influence the credit availability in the economy. These measures include credit rationing, moral suasion, and direct controls. Therefore, this option is incorrect.
b) General measures: General measures refer to the quantitative measures that are used by the central bank to control the money supply in the economy. These measures include open market operations, reserve requirements, and discount rate policy. Therefore, this option is correct.
c) Quota measures: Quota measures refer to the government-imposed limits on the quantity of goods and services that can be produced, sold, or imported. These are not monetary policy tools employed by the central bank. Therefore, this option is incorrect.
d) Selective measures: Selective measures refer to the targeted policies that are aimed at specific sectors or industries in the economy. These measures include tax incentives, subsidies, and import tariffs. Therefore, this option is incorrect.
Conclusion
The correct answer is option 'B' as quantitative measures by the central bank are also known as general measures. These measures are aimed at regulating the supply of money in the economy to achieve macroeconomic objectives.
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