Answer the following questions related to money supply. i. How does t

1.	Answer the following questions related to money supply. i. How does the money supply increase in Indian economy? ii. Whose function is the control of credit? iii. How is the control of credit made, possible?
Answer» i. Money supply increases in Indian economy through the distribution of printed currency and through credit creation. ii. Control of credit is the function of RBI. iii. Control of credit is the made possible by bringing about changes in the rate of interest. As rate of interest increases, volume of loans decreases. As rate of interest decreases, volume of loans increases.

Answer the following questions related to money supply. i. How does the money supply increase in Indian economy? ii. Whose function is the control of credit? iii. How is the control of credit made, possible?

Answer»

i. Money supply increases in Indian economy through the distribution of printed currency and through credit creation.

ii. Control of credit is the function of RBI.

iii. Control of credit is the made possible by bringing about changes in the rate of interest. As rate of interest increases, volume of loans decreases. As rate of interest decreases, volume of loans increases.

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Answer the following questions related to money supply. i. How does the money supply increase in Indian economy? ii. Whose function is the control of credit? iii. How is the control of credit made, possible?

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