WORLD WAR I
LEAGUE OF NATIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Countries were too afraid of being humiliated by other countries.
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Some countries did not care about being condemned.
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There were no other real consequences other than being condemned.
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The leaders of the League had no morals themselves.
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Detailed explanation-1: -Moral Suasion refers to a type of influencing procedure which is applied by Central Banks to keep the pressure on commercial banks in order to abide by the monetary policies that are established. It is carried out by transferring speeches, seminars and meetings.
Detailed explanation-2: -Another example where moral suasion is used is when the Central Banks attempt to influence the market rate of inflation instead of implementing specific measures or operations.
Detailed explanation-3: -Moral suasion is a qualitative method of credit control, being used by the central bank. Under this method, the Central Bank merely uses its moral influence on the commercial banks. It includes the advice, suggestion request and persuasion with the commercial banks to co-operate with the Central Bank.
Detailed explanation-4: -Moral suasion is a request by the RBI to the commercial banks to take specific measures as per the economy’s trends. For instance, RBI may direct banks not to give out certain loans. It includes psychological means and informal means of selective credit control.