ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Contraction of credit only
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Extension of credit only
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Extension and contraction of money supply
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none of these
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Detailed explanation-1: -Credit control means extension and contraction of the money supply.
Detailed explanation-2: -Credit control is a business strategy that promotes the selling of goods or services by extending credit to customers. Most businesses try to extend credit to customers with a good credit history to ensure payment of the goods or services.
Detailed explanation-3: -Contraction of money supply A contractionary or tight monetary policy reduces liquidity and increases interest rates which has a negative impact on both production and consumption and therefore, economic growth.
Detailed explanation-4: -Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time.