8. The Discount Rate The refinancing rate is the interest rate a central bank like the Bank of England or European Central Bank (ECB) charges on short-term loans to the banking sector. Which of the following statements about the refinancing rate are true? Check all that apply. = The refinancing rate is a primary barometer of central bank policy reported in the media. If the central bank wants to contract the monetary supply, it raises the refinancing rate. = A higher refinancing rate encourages banks to borrow reserves and make loans. To meet their liquidity requirements, banks agree to repurchase assets put up as collateral for loans from the central bank.

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.