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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.

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