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Practice mode Money, Interest Rates And Output

What is the refinancing rate?

Correct answer B. The interest rate the European Central Bank charges on loans to banks

Explanation

The refinancing rate is the interest rate a central bank such as the ECB charges commercial banks when it lends them funds, and it is its main policy rate.

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Question 01 Money, Interest Rates And Output

If all banks keep a 100 percent reserve ratio, what happens when someone deposits Rs 1,000 of currency in a bank?

Correct answer E. The money supply is unaffected

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Question 02 Money, Interest Rates And Output

Which of the following statements is NOT true?

Correct answer A. Commercial banks may borrow from and lend to each other, and the interest rate at which they do this is called the refinancing rate

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