WAEC Economics 2018 Objective — Question 37
Question 37 of 50 from the West African Examinations Council (WAEC) Economics 2018 Objective paper, with the correct answer and a full explanation.
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What happens when the central bank increases the bank rate in an economy?
- A. borrowing is discouragedCorrect
- B. customers increase their borrowing
- C. banks can increase their lending
- D. money supply increases
Explanation
A higher bank rate raises the cost of borrowing, which discourages borrowing by commercial banks and, in turn, by their customers.
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