Question

109. An increase in the bank rate, other things being the same, will lead to:
* (1) Decline in the cost of credit
उधार की लागत में कमी
(2) Increase in the cost of credit
उधार की लागत में वृद्धि
(3) Neither decline nor increase in the cost of credit
उधार की लागत में न कमी न वृद्धि ।
(4) None of the three
मीनों में से कोई नहीं​

Answer 1

i think it is (2) increase in the cost of credit

Answer 2

Answer:

The correct option is (2) Increase in the cost of credit उधार की लागत में वृद्धि

Explaination:

• An increase in the bank rate means that the central bank has increased the cost of borrowing money for commercial banks. This makes it more expensive for commercial banks to borrow funds from the central bank.
• When commercial banks face higher borrowing costs, they may pass on this increase in costs to their customers in the form of higher interest rates on loans and credit facilities.
• This results in an increase in the cost of credit, which is the cost of borrowing money for consumers and businesses.

Bank rate

The bank rate is the interest rate at which the central bank of a country lends money to commercial banks. When commercial banks need funds to meet their liquidity requirements, they can borrow from the central bank at the bank rate.

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