What is referred by the discount rate________________?
Correct answer: C. Both of them
- A. Advance deduction of the interest in purchasing, selling or lending a commercial paper
- B. State (central) Bank's interest rate on loans to its member banks
- C. Both of them
- D. None of them
Explanation
The discount rate can refer to the rate applied when commercial paper is discounted and, in monetary policy, to the central bank's lending rate for member banks. Since both uses are represented, 'both of them' is the intended answer.
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