ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Moral Suasion is not quantitative credit control instrument of credit control. Moral Suasion implies persuasion and request made by the Central Bank to the Commercial Banks to cooperate with the general monetary policy of the former.

Detailed explanation-2: -The correct answer is ‘A’-Bank Rate. The important quantitative methods of credit control is (a) bank rate. 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.

Detailed explanation-3: -Regulation of consumer credit act as a qualitative credit control measure of the central bank as in the time of inflation or deflation, they regulate the consumer credit on a certain relative products in order to regulate uncertain market conditions.

Detailed explanation-4: -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.

Detailed explanation-5: -The important qualitative or selective methods of credit control are; (a) Marginal Requirements, (b) Regulation of Consumer Credit, (c) Credit Rationing, (d) Moral Suasion and (e) Direct Action. Quantitative or General Methods: 1. Bank Rate: It is the also known as the discount rate.