Monetary qualitative measures include _________.
Monetary qualitative measures include _________.
The correct option is C both above
Qualitative measures of monetary policy includes
those instruments which focus on the selected sectors of the economy. It
includes:
A. Margin
Requirement:
Margin
requirement refers to the difference between the current value of the security
offered for loan (called collateral) and the value of loan granted. It is
a qualitative method of credit control adopted by the central bank in order to
stabilize the economy from inflation or deflation.
B. Rationing
of Credit:
Rationing of
credit refers to fixation of credit quotas for different business activities
which is introduced when the flow of credit is to be checked particularly for
speculative activities in the economy.
C. Moral
Suasion:
The central
bank makes the member bank agree through persuasion or pressure to follow its
directives which is generally not ignored by the member banks. The banks are
advised to restrict the flow of credit during inflation and be liberal in
lending during deflation.
Qualitative measures of monetary policy includes those instruments which focus on the selected sectors of the economy. It includes:
A. Margin Requirement:
Margin
requirement refers to the difference between the current value of the security
offered for loan (called collateral) and the value of loan granted. It is
a qualitative method of credit control adopted by the central bank in order to
stabilize the economy from inflation or deflation.
B. Rationing of Credit:
Rationing of credit refers to fixation of credit quotas for different business activities which is introduced when the flow of credit is to be checked particularly for speculative activities in the economy.
C. Moral Suasion:
The central bank makes the member bank agree through persuasion or pressure to follow its directives which is generally not ignored by the member banks. The banks are advised to restrict the flow of credit during inflation and be liberal in lending during deflation.
