The Purpose for a Central Bank to Set Negative Interest

question 47

Multiple Choice

The purpose for a central bank to set negative interest rates on bank's deposit is to

• A)stimulate the economy by encouraging banks to lend out the deposits they were keeping at the central bank.
• B)increase bank's cost to holding cash.
• C)prevent banks from paying positive interest rates to their depositors.
• D)make banks less likely to lend.