12 - Monetary Policy Definitions

Question 1

Bank Rate

Answer 1

The base rate of interest charged by a central bank while lending loans to a commercial bank.

Question 2

Central Bank

Answer 2

A national bank providing financial and banking services for the government and banking system.

Question 3

Dividend

Answer 3

The distribution of a company’s earnings to it’s shareholders, determined by the board of directors.

Question 4

Financial Sector

Answer 4

A section of the economy made up of firms and institutions that provide financial services to commercial and retail customer.

Question 5

Interest

Answer 5

The cost of borrowing, and the reward for saving.

Question 6

Monetary Policy

Answer 6

Action that a country’s central bank or government can take to influence how much money is in the economy, and how much it costs to borrow.

Question 7

Quantitative Easing

Answer 7

A monetary policy which aims to increase liquidity in a financial system.