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Determination of Income and Employment — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsDetermination of Income and Employment1 Mark
Question
During excess demand, Central Bank will:
  1. Increase margin requirement.
  2. Decrease margin requirement.
  3. Keep margin requirement constant.
  4. Keep margin requirement zero.
✓

Answer

  1. Increase margin requirement.

Explanation:

Margin requirement is the difference between the market value of securities provided by the borrower and the amount of loan granted to him.

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