Suppose that the central bank wants to lower general interest rates. An appropriate policy for the central bank would be to:

Question

Quizplus · Accepted Answer

Reducing the bank rate, which is the interest rate at which commercial banks can borrow from the central bank, can lower general interest rates. This is because when the cost of borrowing for banks decreases, they can offer loans at lower interest rates to consumers and businesses, stimulating economic activity.

Suppose That the Central Bank Wants to Lower General Interest