Site navigation

Which of the following is not a limitation of Bank rate policy ?

Bank rate is a general, non-discriminatory instrument of credit control, so describing it as discriminatory is incorrect. Its effectiveness is limited when market interest…

Choose your answer

Which of the following is not a limitation of Bank rate policy ?

Select one answer
Answer and explanation

Correct answer D

Bank rate is a general, non-discriminatory instrument of credit control, so describing it as discriminatory is incorrect. Its effectiveness is limited when market interest rates do not follow it, costs and prices are rigid, or banks do not depend on central-bank borrowing.

Practice for these exams

  • Madhya Pradesh SET (MP SET)

Related question papers

Related exam syllabi

Related questions in this topic