Central bank functions-controller of credit, Managerial Economics

Assignment Help:

Controller of Credit

The principles of credit control by the central bank were discovered and enunciated after the publication of Bagehot Lombard street in 1873. Even after 1873 the criteria by which the central bank acted were almost entirely rules of thumb and little or no attempt was made at conscious control in pursuit of a consistent policy before world war I. Today however control of credit is the most important function of a central bank and it embraces the most important aspect of central banking policy. It is through this function that all the order function are united and serve a common purpose. So important is this function that if finds place in the law of all central banks. For example the reserve bank of India act 1934, states that bank is generally to operate the currency and credit system of the country to its advantage. The need for controlling credit is obvious. Credit s has become more important than money although latter is the basis of the former. Unwarranted fluctuations in the volume of credit by causing wide fluctuations in the value of money cause great social and economic unrest in the country . the experience of last one hundred years is a testimony to the need for controlling credit in order to maintain the economic and political stability in the economy.


Related Discussions:- Central bank functions-controller of credit

Weston Industrial Manufacturing Products ("WIMP") has the ca, I would like ...

I would like to get the answer to the question - Weston Industrial Manufacturing Products ("WIMP") has the capability to produce a variety of industrial products, including a numb

Per capita income to compare standard of living, PROBLEMS OF USING PER CAPI...

PROBLEMS OF USING PER CAPITA INCOME TO COMPARE STANDARD OF LIVING OVER TIME 1)       The composition of output may change. e.g. more defence-related goods may be produced and

Research methods, measurement and scaling techniques in business research

measurement and scaling techniques in business research

Uses of national income figures, USES OF NATIONAL INCOME FIGURES We...

USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o

Proportion of market supplied - determinants of demand, Q. Proportion of Ma...

Q. Proportion of Market Supplied - Determinants of Demand? Price elasticity of market demand moreover relies on the proportion of market supplied at the determined price. If le

expected profit, The Learned Book Company has a choice of publishing one o...

The Learned Book Company has a choice of publishing one of two books o the subject of Greek mythology.  It expects the sales period for each to be extremely short, and it estimates

Short run equilibrium of the firm, SHORT RUN EQUILIBRIUM OF THE FIRM A...

SHORT RUN EQUILIBRIUM OF THE FIRM A firm is in equilibrium when it is maximizing its profits, and can't make bigger profits by altering the price and output level for its prod

Price elasticity of supply, Price Elasticity of Supply Price Elasticit...

Price Elasticity of Supply Price Elasticity of supply measures the degree of responsiveness of quantity supplied to changes in  price.  The co-efficient of the elasticity of s

Fundamental, Fundamental of managerial economic

Fundamental of managerial economic

Aggregate demand, AGGREGATE DEMAND This refers to the total planned or...

AGGREGATE DEMAND This refers to the total planned or desired spending in the economy as a whole in a given period. It is made up of consumption demand by individuals, planned

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd