Question on: JAMB Economics - 2022
If the Central Bank increases its bank rate
A
many banks will shut down their operations
B
customers will borrow more from banks
C
the supply of money may be reduced
D
interest charges by banks will fall
Ask EduPadi AI for a detailed answer
Correct Option: C
Option C is the correct answer.Â
An increase in the bank rate will cause commercial banks to raise their interest charges, leading to a reduction in borrowing by the general public and a decrease in the money supply due to the high interest rate.
Add your answer
Please share this, thanks!
No responses