{"id":32820,"date":"2024-04-15T09:07:16","date_gmt":"2024-04-15T09:07:16","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=32820"},"modified":"2024-04-15T09:07:16","modified_gmt":"2024-04-15T09:07:16","slug":"bank-rate-is-the-rate","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/bank-rate-is-the-rate\/","title":{"rendered":"Bank rate is the rate"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a99b69525d54\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    On which banks provide loan of debt                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"true\">\r\n                    On which RBI rediscounts eligible exchanges                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    On which commercial banks take loans                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    On which development banks take loans                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: B. On which RBI rediscounts eligible exchanges.<\/p>\n<p>Bank rate is the interest rate at which the central bank of a country lends money to commercial banks. It is a key tool that central banks use to control the money supply and interest rates <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> in the economy.<\/p>\n<p>When the central bank increases the bank rate, it makes it more expensive for commercial banks to borrow money. This discourages lending and helps to slow down the economy. When the central bank decreases the bank rate, it makes it cheaper for commercial banks to borrow money. This encourages lending and helps to stimulate the economy.<\/p>\n<p>The bank rate is also used by the central bank to set the interest rates on other types of loans, such as mortgages and car loans. When the bank rate is high, other interest rates tend to be high as well. This makes it more expensive for businesses and consumers to borrow money, which can slow down the economy. When the bank rate is low, other interest rates tend to be low as well. This makes it cheaper for businesses and consumers to borrow money, which can stimulate the economy.<\/p>\n<p>The bank rate is a powerful tool that can have a significant impact on the economy. However, it is important to note that the bank rate is just one of many tools that central banks use to manage the economy. Other tools include open market operations, reserve requirements, and moral suasion.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<p>A. <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> On which banks provide loan of debt. This is not the correct answer because the bank rate is the interest rate at which the central bank lends money to commercial banks, not the interest rate at which commercial banks lend money to their customers.<\/p>\n<p>B. On which RBI rediscounts eligible exchanges. This is the correct answer because the bank rate is the interest rate at which the central bank lends money to commercial banks, and the central bank uses the bank rate to control the money supply and interest rates in the economy.<\/p>\n<p>C. On which commercial banks take loans. This is not the correct answer because the bank rate is the interest rate at which the central bank lends money to commercial banks, not the interest rate at which commercial banks borrow money from each other.<\/p>\n<p>D. On which development banks take loans. This is not the correct answer because the bank rate is the interest rate at which the central bank lends money to commercial banks, not the interest rate at which development banks borrow money from the central bank.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[699],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bank rate is the rate<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/bank-rate-is-the-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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