Chapter 13 - Central Banking Economics Solutions for Class 12 Commerce Economics

Chapter 13 - Central Banking

Economics Solutions for Class 12 Commerce Economics

Fill in the blanks with appropriate alternatives given in the brackets.

Match the following

State whether the following statements are TRUE or FALSE.

1. Credit rationing is quantitative credit control measure of Central bank.

2. Regulation of Consumer Credit is a quantitative credit control measure of Central Bank.

3. Bank Rate is the selective credit control measure used by the Central Bank of the country.

4. Central Bank also performs commercial banking business.

5. The main objective of a Central Bank is to earn profit.

Define or Explain the following concepts.

1. Prof. Samuelson's definition of Central Bank

2. Open Market Operation

3. Bank Rate

4. Moral suasion

5. Cash Reserve Ratio

6. Clearing House System

7. Central Bank as Bank of Issue

Give reasons or explain.

1. Clearing house system economises the use of cash.

2. Central Bank acts as a lender of the last resort.

3. The CRR affects the lending capacity of the banks.

4. As a banker to the government, the Central Bank transfers government funds.

5. A Central Bank may take 'Direct Action' against the defaulting commercial banks.

Distinguish between:

1. Central Bank and Commercial Bank

2. Quantitative Credit Control Measures and Qualitative Credit Control Measures

3. Bank Rate and Open Market Operations

4. Cash Reserve Ratio and Statutory Liquidity Ratio

Write short notes on:

1. Definition of a Central Bank

2. Issuing Directives

3. Central Bank's measure of regulation of consumer credit

4. Regulation of Margin Requirements

5. Cash Reserve Ratio (CRR)

6. Bank Rate

7. Open Market Operations (OMO)

Answer the following questions:

1. Central Bank of the country has a monopoly of note issue. Explain.

2. How does a Central Bank (for example RBI) transfer funds from one place to another? Illustrate.

3. Explain the Data Collection and Publicity functions of the Central Bank.

4. What are the various measures of quantitative credit control?

5. What are the various measures of qualitative credit control?

State with reasons whether you agree or disagree with the following statements.

1. Central Bank is the Bank of Issue.

2. A co-operative bank acts as a lender of last resort.

3. Credit control is the function of the Central Bank of the country.

4. Central Bank is a profit-making institution.

5. Central Bank having monopoly of note issue is most appropriate institute of the government.

Answer in detail.

What are the qualitative measures of credit control?

Explain the functions of the Central Bank.

Explain Regulation of consumer credit as a qualitative measure of the Central Bank of India.