Question

An increase in the Bank Rate generally indicates that the

(a) Market rate of interest is likely to fall
(b) Central Bank is no longer making loans to commercial banks
(c) Central Bank is following an easy money policy
(d) Central Bank is following a tight money policy

Answer 1

An increase in the Bank Rate generally indicates that the Central Bank is following a tight money policy.

Answer 2

the answer is (d) Central Bank is following a tight money policy