Question

When the central bank increases the repo rate, what is its impact on borrowing and lending in the economy?

Q: Answer-When the central bank increases the repo rate, what is its impact on borrowing and lending in the ec...

When the central bank increases the repo rate, it discourages borrowing and encourages saving by making borrowing more expensive for commercial banks, which in turn leads to higher interest rates for borrowers.

A It encourages more borrowing and lending

B It discourages borrowing and encourages saving

C It has no impact on borrowing and lending

D It increases interest rates for borrowers and decreases rates for lenders

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When the central bank increases the repo rate, what is its impact on borrowing and lending in the economy?

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