Question
Outline four ways in which the Central Bank may use to reduce the amount of money in circulation.
Answer
i) Increase in the bank rate
ii) Buying of government securities in the open market
iii) Increase cash or liquidity ratio
iv) Increase in compulsory deposit requirement
v) Selective credit control
vi) Reduce margin requirement
ii) Buying of government securities in the open market
iii) Increase cash or liquidity ratio
iv) Increase in compulsory deposit requirement
v) Selective credit control
vi) Reduce margin requirement
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