Economics · Credit Squeeze
How do monetary authorities typically implement a 'credit squeeze' (credit crunch) in an economy?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1By tightening credit controls and restricting the general availability of loans.✓
- 2By providing unconditional cash subsidies to all private sector businesses.
- 3By abolishing all capital adequacy ratios for domestic commercial banks.
- 4By drastically lowering the policy repo rate to encourage aggressive spending.
Correct answer
By tightening credit controls and restricting the general availability of loans.
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