Q4 of 34 Page 1

Name any. two quantitative tools to control credit creation in an economy

Or


What are demand deposits? 1


Two quantitative tools to control credit creation in an economy are bank rate and repo rate.

Bank rate is the rate at which central bank provides loans to commercial bank without any collateral.


Repo rate is the rate at which central bank provides loans to commercial bank not without any collateral. Repo rate relates to short term borrowings.


Or


Demand deposits are those deposits which can be withdrawn from the bank on demand or by writing cheques or ATM any time. A demand deposit is an account with a bank or other financial institution.


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