Question

 In which ways may the Central Bank use to reduce the amount of money in circulation?

Tools of monetary control 

Answer 1

Ways Central Bank may use to reduce the amount of money in circulation include;

• Increase in the bank rate
• Buying of government securities in the open market
• Increase cash or liquidity ratio
• Increase in compulsory deposit requirement
• Selective credit control
• Reduce margin requirement
• Request commercial banks to control credit

Comments

Use simple language