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…
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Which of the following is not a limitation of Bank rate policy ?
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.
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Madhya Pradesh SET (MP SET)