Which sentence best completes the diagram?
?
Banks are more likely to
lend money.
A. A central bank purchases bonds on the market.
B. A central bank lowers interest rates on reserves.
C. A central bank sells bonds on the market.
D. A central bank raises interest rates on reserves.

The rate at which deposits or loans are charged or awarded for the given period of time is known as the interest rate. Usually, the interest rate is fixed at the time of deposit or lending.

When the central bank lowers the interest rates on reserves, it motivates the banks to lend money to its customers, as the bank will benefit by getting higher returns on such loans.

Hence, option B holds true regarding the interest rates.

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Which sentence best completes the diagram? ? Banks are more likely to lend money. A. A central bank purchases bonds on the market. B. A central bank lowers interest rates on reserves. C. A central bank sells bonds on the market. D. A central bank raises interest rates on reserves.

Respuesta :

What is the interest rate?

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Which sentence best completes the diagram?
?
Banks are more likely to
lend money.
A. A central bank purchases bonds on the market.
B. A central bank lowers interest rates on reserves.
C. A central bank sells bonds on the market.
D. A central bank raises interest rates on reserves.