Question

Bank rate is the rate at which

• A. commercial banks borrow long-term funds from the central bank
• B. the central bank borrows short-term funds from commercial banks
• C. the central bank borrow long-term funds from commercial banks
• D. commercial banks borrow short-term funds from the central bank

Answer 1

The correct option is D

commercial banks borrow short-term funds from the central bank

Bank rate is the rate at which commercial banks borrow short-term funds from the central bank.