Which of the following is a qualitative method of credit control used by RBI?
A. Open Market Operations
B. Bank Rate
C. Cash Reserve Ratio
D. Moral Suasion
Answer: Option D
Solution (By JKSSB Mock Tests)
Moral suasion is a qualitative (selective) method of credit control where RBI persuades banks to follow certain credit policies. Bank Rate, OMO and CRR are quantitative methods.
Explanation:
The simple Keynesian consumption function states that current consumption depends primarily on current disposable income, with a positive marginal propensity to consume less than one.
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