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Question

The rate at which the central bank lends money to member commercial banks against approved securities is known as


A

Marginal rate

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B

Money rate

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C

Bank rate

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D

Interest rate

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Solution

The correct option is C

Bank rate


The bank rate policy is the traditional method of credit control used by the central bank. The rate at which the central bank lends money to its member commercial banks against approved securities is known as the bank rate.


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