Which of the following is a qualitative tool of monetary policy?
A. Cash Reserve Ratio
B. Selective credit control
C. Repo rate
D. Open market operations
Answer: Option B
Solution (By JKSSB Mock Tests)
Selective credit controls (such as margin requirements and credit ceilings for specific sectors) are qualitative measures aimed at directing credit flow rather than controlling its overall volume.
Explanation:
The Feldstein-Horioka puzzle is the empirical finding of a high correlation between domestic saving and domestic investment rates, which appears inconsistent with perfect international capital mobility.
Explanation:
Balance of Trade is the difference between the value of exports and imports of merchandise (goods) only. Balance of payments is a broader concept including services and capital flows.
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