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Double Column Cash Book

The qualitati...

Question

The qualitative method used by the central bank to control credit affects the

A

Quantity of credit

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B

Types of credit

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C

Total volume of credit

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D

Liquidity of credit

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Solution

The correct option is B
Types of credit

The qualitative method used by the central bank to control credit affects the types of credit extended by commercial banks. They affect the composition of credit in the economy.

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Similar questions

Q. Qualitative credit control by a Central Bank exercised by which of the following measure ?
1.Credit rationing
2. Consumers credit regulation
3. Changes in margin requirement on security loans.
Select the correct answer using the codes given below:

Q. Distinguish between:

1. Central Bank and Commercial Bank
2. Quantitative Credit Control Measures and Qualitative Credit Control Measures
3. Bank Rate and Open Market Operations
4. Cash Reserve Ratio and Statutory Liquidity Ratio

Q. Explain any two methods of credit control used by central bank.

Q. State whether the following statements are TRUE or FALSE.

1. Credit rationing is quantitative credit control measure of Central bank.
2. Regulation of Consumer Credit is a quantitative credit control measure of Central Bank.
3. Bank Rate is the selective credit control measure used by the Central Bank of the country.
4. Central Bank also performs commercial banking business.
5. The main objective of a Central Bank is to earn profit.

Q. Discuss four qualitative measures of the Central Bank to control credit in the economy.

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