Which of the following interest rates is a central bank MOST LIKELY to target directly when using monetary policy?

Choose 1 answer:

A The overnight interbank lending rate
(B) The long-term interest rate
(c) The real interest rate

D The central bank-to-bank lending rate
(E) The home lending interest rate

Question

Which of the following interest rates is a central bank MOST LIKELY to target directly when using monetary policy?

Choose 1 answer:

A The overnight interbank lending rate
(B) The long-term interest rate
(c) The real interest rate

D The central bank-to-bank lending rate
(E) The home lending interest rate

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ Identify the interest rate that central banks are most likely to target directly when using monetary policy. ‖ ‖ step 2 ⋮ The central bank typically targets the overnight interbank lending rate because it directly influences other interest rates and the overall money supply. ‖ ***A*** ∻Key Concept∻ ⚹Overnight Interbank Lending Rate⚹ ∻Explanation∻ ⚹The overnight interbank lending rate is the rate at which banks lend to each other overnight. Central banks target this rate to control liquidity and influence other interest rates in the economy.⚹◊What type of statistical analysis can be used to determine the impact of central bank's target interest rates on the economy?⍭ Generate me a similar question◊

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