What type of monetary policy raises the bank rate?
A) an expansionary policy, because the ratio of excess to total reserves in the banking system is raised
B) a contractionary policy, because the banks' costs of borrowing are lowered
C) a contractionary policy, because the chartered banks' costs of borrowing are lowered
D) an expansionary policy, because allowing banks to charge higher interest rates will increase their willingness to make loans
Correct Answer:
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