If the Central Bank increases its bank rate
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
Correct Answer: Option C
Explanation:
A rise in the bank rate means that the interest charge from commercial banks will increase their interest which reduce the borrowing by general public and interest rate is high, so the money supply would decrease.
A rise in the bank rate means that the interest charge from commercial banks will increase their interest which reduce the borrowing by general public and interest rate is high, so the money supply would decrease.