Which Statement Best Describes the Outcome of a Decrease in the Bank

question 162

Multiple Choice

Which statement best describes the outcome of a decrease in the bank rate?

• A) Banks will borrow less from Bank of Canada, so reserves increase.
• B) Banks will borrow less from Bank of Canada, so reserves decrease.
• C) Banks will borrow more from Bank of Canada, so reserves increase.
• D) Banks will borrow more from Bank of Canada, so reserves decrease.