how the Central Bank impacts the overall economySolutionthe

how the Central Bank impacts the overall economy

Solution

the central bank employs various techniques to create balance in the economy-expansionary and contractionary. Pursuing Open Market Operations, setting Reserve Ratios, change the bank rate are some of the techniques. Regulation of consumer credit or Direct Action & Rationing of credit indirectly impact the economy. Increasing interest or decreasing interest rate through above techniques influence inflation and directly impact the economy.