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Interest Ceiling:
Interest ceiling is also considered to be one of the methods of debt management. In U.S.A soon after the World War I, an interest ceiling of 4 ¼ per cent on securities in excess of five years, excluding those issued to government securities was imposed. But this ceiling remained ineffective for long period and the congress allowed the Treasury to issue bonds at above ceiling gave rise to several controversies and has been proved to be an ineffective measure. Moreover, it places an undesirable constraint in adopting a stabilization policy may not be rational and advisable.
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