Question
What does a bank’s interest rate measure?
the cost of depositing money in a bank
the cost of borrowing money from a bank
the cost of starting a new business
the cost of keeping a bank in business
the cost of depositing money in a bank
the cost of borrowing money from a bank
the cost of starting a new business
the cost of keeping a bank in business
Answers
GPT-4o mini
A bank’s interest rate primarily measures **the cost of borrowing money from a bank**. When you take out a loan, the interest rate is the cost you pay for borrowing that money, expressed as a percentage of the loan amount. It can also reflect the return on deposits, indicating how much the bank pays you to keep your money with them. However, in the context of your question, the primary focus is on the borrowing aspect.