WAEC - Economics (2022 - No. 32)
If the Central Bank increases its bank rate
many banks will shut down their operations
customers will borrow more from banks
the supply of money may be reduced
interest charges by banks will fall
Açıklama
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.