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Which of the following is a qualitative instrument of credit control?
Bank rate
Repo rate
Open Market Operation
Margin Requirements
- Bank Rate: This is a quantitative tool. It's the interest rate at which a central bank lends to commercial banks. It influences monetary policy and the overall economy by affecting interest rates.
- Repo Rate: Another quantitative instrument. It's the rate at which central banks lend to commercial banks for short-term loans. Changes in the repo rate impact the economy by influencing borrowing costs.
- Open Market Operation: Quantitative as well. It involves the buying and selling of government securities to regulate the money supply. It directly impacts liquidity and interest rates.
- Margin Requirements: This is a qualitative tool. It involves setting the ratio of funds that must be kept with the central bank against liabilities. It influences the availability of credit without changing interest rates.
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