Multiple choice

Bank rate, open market operations, changes in reserve requirement are

  1. qualitative controls

  2. quantitative controls

  3. combination of (1) & (2)

  4. neither (1) nor (2)

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Quantitative credit controls affect the overall volume of credit in the economy by working on the total money supply. Bank rate policy, open market operations, and variable reserve ratios all regulate the quantity of money/credit available. Qualitative controls like margin requirements target specific sectors or uses of credit.

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