Which concept is used to measure the cost of borrowing money?

The Official Cash Rate (OCR) is the correct choice for measuring the cost of borrowing money. It is a key interest rate set by a country's central bank, which influences the interest rates that banks offer to their customers. When the OCR is increased, borrowing costs rise, leading to higher interest rates on loans and credit. Conversely, when the OCR is lowered, borrowing becomes cheaper, which often encourages spending and investment.

This rate serves as a benchmark for determining how much banks will charge for loans and how much they will pay on deposits. Changes in the OCR can impact economic activity by affecting consumer and business borrowing decisions, making it a critical tool for managing economic growth and inflation.

In contrast, Business Confidence, Consumer Sentiment, and Market Rate relate to different aspects of the economy. Business Confidence refers to how optimistic or pessimistic businesses are about future economic conditions, which influences their investment and hiring decisions. Consumer Sentiment reflects consumers' attitudes about their financial situation and the economy, affecting their spending. Market Rate often refers to the prevailing interest rates in different segments of the market but does not specifically denote the cost of borrowing as set by the central bank, making OCR the most relevant concept for this question.