Which of the following is a "Qualitative instrument" to control supply of money?
Answer & explanation
Correct answer: option 2
The correct answer is option 2: Moral suasion
Following are the quantitative measures:
- Bank rate
- Repo rate
- Reverse repo rate
- Open market operations
- Varying legal reserve requirements i.e. CRR, SLR
Following are the qualitative measures:
- Imposing margin requirements
- Moral suasion and direct action
- Selective credit control