Question: What is the \'discount rate\' in banking?

Options:

1. The interest rate charged to commercial banks for loans from the central bank
2. The rate at which consumers can borrow money
3. The rate of return on savings accounts
4. The interest rate on government bonds

Correct Answer: The interest rate charged to commercial banks for loans from the central bank

Solution:

The discount rate is the interest rate charged to commercial banks for loans obtained from the central bank.