Concept:The bank rate is the interest rate at which the central bank lends to commercial banks. Increasing it makes borrowing more expensive.
Explanation:When the central bank raises the bank rate, commercial banks must pay more to borrow from the central bank.
Banks then increase the interest rates they charge their customers.
Higher interest rates discourage individuals and businesses from taking loans.
This reduces borrowing and decreases the money supply in the economy.
Thus, the correct statement is that borrowing is discouraged.
Answer:A. borrowing is discouraged.