Q1. Which among the following is a quantitative method of credit control by the Central Bank?
A Marginal requirements
B Credit rationing
C Direct action
D Bank rate Correct
Explanation
The bank rate is a quantitative, or general, method of credit control because it influences the overall cost and availability of credit in the economy. When the central bank changes this rate, commercial banks' lending conditions are affected broadly. Marginal requirements are selective controls aimed at particular securities or loans. Credit rationing also targets the allocation of credit rather than the total credit volume through a general price signal. Direct action is an administrative or qualitative measure used against specific banks.