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insens350 [35]
2 years ago
15

A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the chang

e in the rate.
Business
1 answer:
Nitella [24]2 years ago
3 0

A decrease in the discount rate increases bank reserves and increase the money supply if banks respond appropriately to the change in the rate.

<h3>What is discount rate?</h3>

Dscount rate serves as the rate of interest that the central bank charges on its loans and advances to a commercial bank.

Therefore, when there is increase in discount rate, there will be increase in money supply.

Learn more about discount rate at;

brainly.com/question/7459025

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