Macroeconomics

Policy Rate

Definition

What is Policy Rate?

The benchmark interest rate set or targeted by a central bank to influence financial conditions.

Example in practice

A policy-rate increase tends to raise short-term borrowing costs.

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The total market value of final goods and services produced within a country during a period.

Gross domestic product adjusted for changes in prices.

Gross domestic product measured at current prices without adjusting for inflation.

A market environment in which investors favour higher-risk assets.

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