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Q » Explain interest rate policy.
06 Dec, 2025
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A » Interest rate policy involves central banks adjusting the cost of borrowing to influence economic activity, inflation, and employment levels. By raising rates, borrowing becomes more expensive, slowing down spending and investment, which can help control inflation. Conversely, lowering rates encourages borrowing and spending, stimulating economic growth. This tool is crucial for maintaining economic stability and achieving financial objectives like price stability and full employment.
06 Dec, 2025
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