Please, can someone explain bank rate in economics?
Bank rate is the interest rate that is set by a central bank (such as the Federal Reserve in the United States) and that is used to influence or control the economy. It is the rate at which a central bank lends money to commercial banks or other financial institutions. A central bank can increase or decrease the bank rate to stimulate the economy by reducing interest rates, thus making it cheaper to borrow money, or by increasing interest rates, thus making it more expensive to borrow money. A higher bank rate usually has a contractionary effect on the economy, as it increases the cost of borrowing and reduces the amount of money available for investment and consumption.