passwella.
Menu

WAEC Economics 2019 Question 38

Question 38

Financial Institutions

What happens when the central bank increases the bank rate?

  1. A.Amount of borrowing increases
  2. B.Amount of borrowing decreases
  3. C.Supply of money increases
  4. D.Commercial banks are not affected
Show the answer and explanation

Answer: B (Amount of borrowing decreases)

Explanation

A higher bank rate makes loans dearer, so less is borrowed.