Explain credit control method of central bank.
One of the important function of the central bank is to control money supply in the economy. Excessive credit will tend to generate inflationary pressures in the economy, while deficiency of the credit supply may tend to cause depression or deflation. During the period of inflation or in the period of boom, there is a need to 'contrast credit'. Similarly, during the period of depression, there is need to 'expand credit'. In order to maintain economic stability and to promote economic growth,...
