If the Central Bank of Nigeria reduces the bank rate, this will cause
Answer Details
When the Central Bank of Nigeria reduces the bank rate, it becomes cheaper for commercial banks to borrow money from the Central Bank. As a result, commercial banks are likely to increase their lending to customers. This increase in lending means that there will be more money in circulation in the economy, which will lead to an increase in the money supply. Therefore, the correct option is: money supply to increase.