Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Direct Action
Direct action in more than one from has been employed by the central banks either as an alternative to their discount rate policy or open market operations or together with both these methods. In wider sense, direct action includes moral suasion and there are many economists who do not make distinction between the two. However it is desirable to make a clear distinction between moral suasion and direct action, the latter term indicating only such coercive measures as the refusal to rediscount or grant further rediscount facilities to the defaulting banks. Direct action in the sense of refusing rediscount facilities on the part of the central bank to those banks whose credit policy was not conducive to the maintenance of sound credit conditions was given great prominence in America by the federal reserve system during the 19238-29 slump. The reserve bank of India has recently made use of direct action in the form of selective credit control. For the first time the bank issued a directive to banks 17 may 1956 to refrain from excessive lending against commodities in general or forbidding the bank to grant credit in excess of Rs. 50,000 to individual parties against paddy and ride. This was done in order to check speculation and stockpiling of essential goods to bring down their prices and to prevent them from rising further. As result of this directive advances against paddy and ride fall from Rs.26crores in April 1956 to Rs.4crores in October 1956. By another directive issued in September 1956, the scheme of selective credit control was extended to apply to wheat and other food grains. In June 1958 by another directive the commercial banks were further instructed to bring down the amount of their advances against food grains. Subsequently, a spate of directives has been issued from time to time by the reserve Bank of India to the commercial banks forbidding them to grant credit or to grant credit in a prescribed manner and for prescribed purpose.Direct action as a method of credit control suffers, however from certain drawbacks. Dwelling upon the difficulties of success of direct control as a method credit regulation De kock has stated. There are however several limitations to be reckoned with namely, the difficulty for both central and commercial banks to make clear cut distinction at all times and in all cases between essential and non essential industries, productive and unproductive activities, investment and speculation or between legitimate and excessive speculation or consumption the further difficulty of controlling the ultimate use of credit by second, third or fourth parties, the dangers involved in the division of responsibility between the central bank and the commercial banks for the soundness of the lending operations of the latter and the possibility of forfeiting the wholehearted and active co operation of the commercial banks as a result of undue control and intervention.
Explain cost output relationship with reference to: a. Total fixed cost and output b. Total variable cost and output
Hawtrey views about Trade Cycle Hawtrey views trade cycle as a purely monetary phenomenon. According to him, inventory cycles result from fluctuations caused in the desired rat
Benefits are: 1) People can create their own decisions 2) The government has limited control, which is good for arrangement 3) Gives freedoms like Enterprise, ownership,
Prices of other goods must remain constant Changes in the prices of other goods frequently impinge on the demand for a particular commodity. If prices of commodities for which
Q. Explain about Smooth Convex Isoquant? Smooth Convex Isoquant: This kind of isoquant presumes continuous substitutability of capital and labour over a certain range, beyond
The institutional intervention theories Collective bargaining provides an example of what is sometimes called bi- lateral monopoly; the trade union being the monopolist suppli
Determine the Theory of Exchange and Price Theory Theory of Exchange is commonly called Price Theory. Price determination under various types of market conditions comes under
The owner of a patent has a contract with a cooperation that gives it right to use the patent. The cooperation will pay the patent owner $2500 yearly for the next 5 years, $3000 fo
Advantages of Planned System i) Uses of resources : Central planning can lead to the full use of all the factors of production, so reducing or ending unemployment. ii
TC=100+0.15Q, Qu=1000-10Pu
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd