What happens when the central bank increases the bank rate?
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Correct Answer: Option B
Explanation:
The central bank normally raises the lending rates in order to discourage borrowing. When the interest charged on loans is high, fewer people will be willing to borrow money from financial institutions.
The central bank normally raises the lending rates in order to discourage borrowing. When the interest charged on loans is high, fewer people will be willing to borrow money from financial institutions.