which sentence best completes the diagram? a central bank reduces the discount rate. a. banks are more…

which sentence best completes the diagram? a central bank reduces the discount rate. a. banks are more likely to borrow money. b. banks are more likely to hire employees. c. banks are more likely to purchase bonds. d. banks are more likely to foreclose on loans.

which sentence best completes the diagram? a central bank reduces the discount rate. a. banks are more likely to borrow money. b. banks are more likely to hire employees. c. banks are more likely to purchase bonds. d. banks are more likely to foreclose on loans.

Answer

Brief Explanations:

The discount rate is the interest - rate central banks charge commercial banks for loans. When the discount rate is reduced, borrowing from the central bank becomes cheaper for commercial banks. So, banks are more likely to borrow money.

Answer:

A. Banks are more likely to borrow money.