-Bank rate policy- by varying the bank rate the central bank gives an indication to the commercial banks as to the rate and interests to charge to their customers. To reduce money supply, bank rate is raised and vice versa
- Cash/liquidity ratio- by varying the liquidity ratio, the central bank can increase or decrease the money supply. To reduce money supply, central bank raises the ratio so that banks keep less for lending and vice versa
- Open market operations- involves buying and selling of government securities. To reduce money supply, the central bank sells treasurer bills and treasury bonds and vice versa
- Special /compulsory deposits- this is a requirement by central banks that commercial banks keep specific amount in the central bank as deposit. To reduce money supply the compulsory deposit is raised so that banks have less to lend to their customers
Selective lending credit control- central can identify sectors that should receive lending from commercial banks. Sectors that are not included have to get funding from other sources which limits money getting into circulation
- Direct action/ supervision- central bank can direct the commercial banks and ensure that they follow the laid down procedures in lending.
Moral persuasion- under special circumstances, the central bank nmay persuade the commercial banks to regulate their lending habits.
- Margin requirement-
- Lending ceiling-
marto answered the question on September 13, 2019 at 11:32
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On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh 24,300.
(Solved)
On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh 24,300.During the month, the following transactions took place
March 3 cash sales paid directly into the bankKsh 16,500
4 bought goods for Ksh 15,000 and paid by cheque
6 cash sales Ksh. 50,000
9 received a cheque of ksh 18,000 from Amolo in full settlement of his debt
13 paid insurance premiums of Ksh 16,000 in cash
15 paid Kamotho by cheque Ksh 9,700 in full settlement of his account less 3% cash discount
21 withdrew Ksh 30,000 from bank for office use
24 received a cheque of Ksh23,750 from Rotich in full settlement of his account less 5% cash discount
25 paid wages in cash Ksh 20,000
30 banked all cash except Ksh 3,000
Required: prepare a three column cash book
Date posted:
September 13, 2019
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Answers (1)
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The following trial balance was extracted from the books of J.B. Traders as at 31st Dec. 2014.Stock on 31/12/2014 was valued at sh. 13,000Required: Prepare...
(Solved)
The following trial balance was extracted from the books of J.B. Traders as at 31st Dec. 2014.
Stock on 31/12/2014 was valued at sh. 13,000
Required: Prepare a Trading Profit and Loss account for the period ended 31/12/2014
Date posted:
September 5, 2019
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Answers (1)
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Luanda Traders had the following balances at 1st Jan 2015 Cash Sh. 180,000 (Dr.) Bank Sh. 67,000 (Cr.) During the month of Jan 2015, the...
(Solved)
Luanda Traders had the following balances at 1st Jan 2015 Cash Sh. 180,000 (Dr.) Bank Sh. 67,000 (Cr.) During the month of Jan 2015, the following transaction took place;
Jan 2 cash sales Sh. 14,500
Jan 6 Mwangi a debtor settled his account of Sh. 45,000 by cheque less 5% cash discount
Jan 8 Sold goods on credit with Sh. 25,000
Jan 14 Paid salaries in cash 50,000
Jan 18 Settled Laboso‘s account of 60,000 by cheque less 3% cash discount.
Jan 21 Received a cheque of 84,000 from Rotich after deducting 10% cash discount
Jan22 Cash purchases paid by cheque sh. 65,000
Jan 24 Cash sales worth 340,000 directly banked Sh. 300,000 cash into the account
Jan 28 Took cash 39,000 for children‘s school fees
Jan 31 Banked all cash except Sh. 36,000
Prepare a dully balanced three column cash book
Date posted:
September 5, 2019
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Answers (1)
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Prepare a duly balanced three column cash book from the following information extracted from the books of Omwami traders.
Jan 1st Balance b/d cash sh.4,000, Bank...
(Solved)
Prepare a duly balanced three column cash book from the following information extracted from the books of Omwami traders.
Jan 1st Balance b/d cash sh.4,000, Bank Sh.27,000
Jan. 4th Settled Olweny creditors account of shs.8000 by cheque having deducted 6% cash discount
Jan 8th Received shs.6,000 cash from Mutoma traders
Jan 16th Deposited shs.4,500 to bank account
Jan 24th Withdrew shs.9200 from bank for private use
Jan 29th Received shs.19950 from Kahawa by cheque after allowing 5% discount
Jan 31st Banked all the cash leaving shs.1500 in the office
Date posted:
September 5, 2019
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Answers (1)
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The table below shows the demand and supply schedules for product A in a week.Using the information given in the table above, draw the demand...
(Solved)
The table below shows the demand and supply schedules for product A in a week.
Using the information given in the table above, draw the demand and supply curves showing the market equilibrium for the product.
Date posted:
September 5, 2019
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Answers (1)
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For each of the following transactions indicate the account to be debited or credited.
(Solved)
For each of the following transactions indicate the account to be debited or credited.
Date posted:
September 5, 2019
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Answers (1)
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The table below shows estimated values for a certain country in millions of dollars.
...
(Solved)
The table below shows estimated values for a certain country in millions of dollars.
US$
Wages and salaries .....................450,000
Income from rent .......................30,000
Profit of corporation ..................40,000
Net interest ............................80,000
Indirect taxes ..........................70,000
Subsidies ...............................200,000
Depreciation............................. 80,000
Net income from abroad..................... 50,000
From the above table calculate;
(a) The gross domestic produce
(b) Gross national product
Date posted:
September 4, 2019
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Answers (1)
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Enter the following transactions in a single column cash book and balance it off.
(Solved)
Enter the following transactions in a single column cash book and balance it off.
2013 August 2nd commenced business with Sh. 14.000 cash and 200,000 at the bank.
2013 August 3rd made cash sales amounting to sh. 6,000
2013 August 5th received cash 16,000 from Marwa, a debtor.
2013 August 12th paid for motor expenses Sh. 7,000 in cash.
2013 August 13th drew Sh. 30,000 from bank for office use.
Date posted:
September 4, 2019
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Answers (1)
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State FOUR Ways in which advertising agencies assist in sales promotion.
(Solved)
State FOUR Ways in which advertising agencies assist in sales promotion.
Date posted:
September 4, 2019
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Answers (1)
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Record the following transactions in a two column cash bookand balance it off as at January 12th2008 January 1 Started business with capital sh. 10,000...
(Solved)
Record the following transactions in a two column cash bookand balance it off as at January 12th2008
January 1 Started business with capital sh. 10,000 cash and sh. 25,000 bank overdraft
January 2 bought stock in cash sh. 6,000
January 3 cash sales sh. 2,500
January 7 bought stock worth sh. 5,000 on credit
January 12 withdrew cash from bank for office use sh. 4,000
Date posted:
September 4, 2019
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Answers (1)
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Highlight four reasons why mail order business is not very popular in Kenya.
(Solved)
Highlight four reasons why mail order business is not very popular in Kenya.
Date posted:
September 4, 2019
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Answers (1)
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The following information relates to Amani Traders for the period ended 30th April 2012.Prepare Amani Traders‘ Trading Account.
(Solved)
The following information relates to Amani Traders for the period ended 30th April 2012.
Prepare Amani Traders‘ Trading Account.
Date posted:
September 3, 2019
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Answers (1)
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Using a diagram illustrate the effects of a positive shift of a demand curve on the equilibrium point, price and quantity.
(Solved)
Using a diagram illustrate the effects of a positive shift of a demand curve on the equilibrium point, price and quantity.
Date posted:
September 3, 2019
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Answers (1)
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State four reasons why short message services (SMS) is replacing letters as a way of communication.
(Solved)
State four reasons why short message services (SMS) is replacing letters as a way of communication.
Date posted:
September 3, 2019
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Answers (1)
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State the unit of carriage for each of the following modes of transport.
(Solved)
State the unit of carriage for each of the following modes of transport.
Date posted:
September 3, 2019
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Answers (1)
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Ndovu bought 200 blankets at Sh.500 each on credit. The terms of sale were 20% trade discount, 10% quantity discount and 5% cash discount if...
(Solved)
Ndovu bought 200 blankets at Sh.500 each on credit. The terms of sale were 20% trade discount, 10% quantity discount and 5% cash discount if payment is made within two weeks. Calculate the amount paid if payment is made after one week.
Date posted:
September 3, 2019
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Answers (1)
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Using a diagram illustrate the effects of a rightward shift in supply curve on equilibrium price and quantity.
(Solved)
Using a diagram illustrate the effects of a rightward shift in supply curve on equilibrium price and quantity.
Date posted:
September 3, 2019
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Answers (1)
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The following trial balance was extracted from Milka traders on 31st Dec 2015.
(Solved)
The following trial balance was extracted from Milka traders on 31st Dec 2015.
Additional information;
Closing stock was sh. 22000
Prepare Milka traders Trading, profit and loss account for the year ending 31/12/2015.
Date posted:
September 3, 2019
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Answers (1)
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Outline four ways in which firms contribute to National income of a country.
(Solved)
Outline four ways in which firms contribute to National income of a country.
Date posted:
September 3, 2019
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Answers (1)
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Using the accounting equation, fill in the missing figures in the following table.
(Solved)
Using the accounting equation, fill in the missing figures in the following table.
Date posted:
September 3, 2019
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Answers (1)