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Question
Bank rate is the rate at which:
Options
Commercial banks purchase government securities from the central bank.
Commercial banks can take loans from the central bank for a short term.
Short-term loans are given by commercial banks.
Commercial bank take loans from the public.
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Solution
Short-term loans are given by commercial banks.
Explanation:
The bank rate is the rate at which the central bank lends money to commercial banks on a short-term basis. Changes in the bank rate can affect the cost of borrowing for commercial banks, which in turn influences the interest rates they give their customers.
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Moral persuasion
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