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| 1. |
what happens to the demand for credit in the economy when repo rate is increased ? |
| Answer» By varying repo rate central Bank increase /decrease supply of money and availablity of credit ,How ? When central Bank repo rate this raies cost of borrowing which discourges commmercial bank in borrowing from central Bank . commercial banks , as a follow up action raise their lending rate of interest to consumers and investors demand is comparaticvely lesser evil as deficient demand causes serious consequences . | |