<Ul> <Li> Employment of some factors of production will have to be reduced by the business people . </Li> <Li> The manufacturers and stock exchange dealers will have to liquidate their stocks, which they held through bank loans, to pay off their loans . </Li> </Ul> <Li> Employment of some factors of production will have to be reduced by the business people . </Li> <Li> The manufacturers and stock exchange dealers will have to liquidate their stocks, which they held through bank loans, to pay off their loans . </Li> <P> The effect of Rise in bank rate by the central bank is shown in the chart (left side). Hence, we can conclude that hike in Bank Rate leads to fall in price level and a fall in the Bank Rate leads to an increase in price level i.e. they share an inverse relationship . </P>

Explain credit control function of a central bank