The bank rate cannot be used to control the money supply with great precision because
A) a change in the bank rate will not affect a bank until two weeks after the change is implemented.
B) its effects on the banks' demand for reserves are uncertain.
C) there is a maximum amount of money that the discount houses can borrow from the Bank of England in any one year.
D) only banks that are members of the Bank of England can borrow from the Bank of England, and most banks are not members of the Bank of England.
Correct Answer:
Verified
Q45: Some argue that the demand curve for
Q46: The Bank of England is likely to
Q47: Which of the following actions by the
Q48: The economy's unemployment rate is 10% and
Q49: Owing to the liquidity trap
A) increases in
Q51: The best instrument for controlling day- to-
Q52: Assume that there is no leakage from
Q53: The money supply has increased from £100
Q54: If the Bank of England raises interest
Q55: What is the effect of raising banks'
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents