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What is Bank Rate ?
  • a)
    It is a rate of interest at which the central bank of the country provides refinancing facilities to the commercial banks.
  • b)
    It is a rate of interest at which the commercial banks give the credit to the prime borrowers.
  • c)
    It is a rate of interest at which the commercial bank gives the credit to all the borrowers.
  • d)
    None of the above.
Correct answer is option 'A'. Can you explain this answer?
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What is Bank Rate ?a)It is a rate of interest at which the central ban...
Often these loans are very short in duration. Lower bank rates can help to expand, when unemployment is high by lowering the cost of funds for borrowers. Conversely, higher bank rates help to reign in the economy, when inflation is higher than desired.
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What is Bank Rate ?a)It is a rate of interest at which the central bank of the country provides refinancing facilities to the commercial banks.b)It is a rate of interest at which the commercial banks give the credit to the prime borrowers.c)It is a rate of interest at which the commercial bank gives the credit to all the borrowers.d)None of the above.Correct answer is option 'A'. Can you explain this answer?
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