Question : The interest rate offered by banks on deposits is called ___________.
Option 1: Loan rate
Option 2: Deposit rate
Option 3: Inflation rate
Option 4: Exchange rate
Correct Answer: Deposit rate
Solution : The correct answer is (b) Deposit rate.
The interest rate offered by banks on deposits is commonly referred to as the deposit rate. When individuals or businesses deposit their money in a bank, they may earn interest on those deposits based on the prevailing deposit rate. The deposit rate is the rate at which the bank compensates depositors for keeping their funds in the bank. It is determined by various factors, including market conditions, the bank's financial health, and the duration of the deposit. The deposit rate represents the return or interest earned by depositors on their savings or fixed-term deposits. The loan rate, on the other hand, refers to the interest rate charged by banks when they lend money to borrowers. The inflation rate measures the rate at which the general price level of goods and services in an economy is increasing. The exchange rate represents the rate at which one currency can be exchanged for another currency.
Question : ___________ is the interest rate charged by banks on loans and advances.
Option 3: Discount rate
Option 4: Prime rate
Question : The interest rate charged by commercial banks on loans is called:
Option 1: Repo rate
Option 2: Reverse repo rate
Option 3: Prime lending rate
Option 4: None of the above
Question : The deposits which arise on account of loans by the banks to the people are called:
Option 1: Primary deposits
Option 2: Secondary deposits
Option 3: Cash deposits
Option 4: Term deposits
Question : What is the term used to describe the rate at which a central bank lends money to commercial banks in a country?
Option 1: Interest rate
Option 2: Inflation rate
Question : What is the term used to describe the difference between the nominal exchange rate and the inflation rate between two countries?
Option 1: Real exchange rate
Option 2: Cross exchange rate
Option 3: Forward exchange rate
Option 4: Spot exchange rate
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