The central bank Can reduce the ability of commercial banks to give out loans by?

A. raising the bank rates
B. reducing special deposits
C. reducing the liquidity ratio
D. issuing more currency

Correct Answer:

Option A = raising the bank rates

Explanation

One way the central bank can reduce the rate at which banks lend money is by raising the interest rates bank charge on loans, this will discourage people from borrowing from commercial banks.