Question

SOS SOMEONE ANSWER:
What happens when a country's central bank decreases the interest rate on
reserves for banks?
A. Banks are required to sell all their treasury securities on the open
market.
B. Banks receive less money from the government for keeping cash
on hand.
C. Banks must lend money at interest rates that are below market
values.
D. Banks are forced to set aside more of their money instead of
lending it.

Answer 1

Answer:Banks receive less money from the government for keeping cash on hand

Answer 2

The thing that happens when a country's central bank decreases the interest rate on reserves for banks will be B. Banks receive less money from the government for keeping cash on hand.

The interest rate refers to the amount that a lender can charge to a borrower. It should be noted that an interest rate is a percentage of the principal. The higher the interest rate, the higher the money gotten by the lender and vice versa.

Therefore, in a situation where when a country's central bank decreases the interest rate on reserves for banks, the banks receive less money from the government for keeping cash on hand.

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