In Determining the Cost of Bank Financing,which Is the Important

question 15

Multiple Choice

In determining the cost of bank financing,which is the important factor?

• A) Prime rate.
• B) Nominal rate.
• C) Annual rate.
• D) Discount rate.

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Definitions:

Contractionary Monetary Policy

Monetary policy measures undertaken by a central bank to reduce inflation and slow down economic growth by decreasing the money supply or increasing interest rates.

Minimum Wage

The lowest remuneration that employers can legally pay their workers, a rate which is set by government legislation.

Unemployment Rate

The segment of the labor force currently without employment but making efforts to find work.

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period of time.