Concept:The central bank controls the lending capacity of commercial banks by using monetary policy tools.
Explanation:When the central bank raises the bank rate, it becomes more expensive for commercial banks to borrow money from the central bank.
This reduces the funds available with commercial banks.
As a result, commercial banks have less money to give out as loans.
Higher bank rates also raise the cost of borrowing for customers, which discourages loan requests.
Therefore, raising the bank rate reduces the ability of commercial banks to give out loans.
Answer:A. raising the bank rates