Match the following: 1. Repo rat

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

Match the following:

1.	Repo rate	A.	The minimum rate at which the central bank of the country gives credit to the commercial bank
2.	Reverse repo rate	B.	The rate of interest charged by the central bank to commercial banks for a short period
3.	Open market operations	C.	When commercial banks have surplus funds they park it will the central bank for a certain rate of interest.
4.	Discount rate	D.	The sale and purchase of government securities in open by the Central Bank

Options:

1-B, 2-C, 3-A, 4-D

1-C, 2-B, 3-D, 4-A

1-C, 2-D, 3-B, 4-A

1-B, 2-C, 3-D, 4-A

Correct Answer:

1-B, 2-C, 3-D, 4-A

Explanation:

Repo rate: The rate of interest charged by the central bank to commercial banks for a short period

Reverse repo rate: When commercial banks have surplus funds they park it will the central bank for a certain rate of interest.

Open market operations: The sale and purchase of government securities in open by the Central Bank

Discount rate: The minimum rate at which the central bank of the country gives credit to the commercial bank