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Direct control and Moral Suasion
Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restrict credit when they wish to limit monetary expansion. Its effectiveness depends on the co-operation of the commercial banks.
INSTRUMENTS OF CREDIT CONTROL The central bank employs several instruments to control aggregate credit in the country. While some instruments like the open market operations mi
Suppose that there is a fixed sum of money available to be spent on public projects, and that a large number of public projects have been evaluated using social cost-benefit analys
Q. What do you mean by Kinked Isoquant? This isoquant presumes only limited substitutability of labour andcapital. There are just a few processes for generating any one commodi
No new substitutes for the commodity If some new substitutes for a commodity appear in the market, its demand normally declines. This is quite natural, since with the availabil
Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential
Structural unemployment Caused by structural changes such that there exist: Cyclical unemployment : During depression, prices are too low and profit margins remain d
Determine a Specific Price of demand of product A proclamation concerning the demand of a product without mentioning its price is worthless. For instance, to state that demand
(a) Describe how commercial banks determine their output, interest rates and profit levels assuming they act as oligopolies. (b) To what extent is the above statement a reality
incremental raising
Arguments for Uneven Distribution of Income and Wealth The basic economic argument to justify large income inequality was the assumption that high personal and corporate income
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