Waec Model Questions Vol1 2021 Economics Question 18

Practice objective / multiple choice question 18 from the 2021 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 18 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

The central bank sets the required reserve ratio at 10 % and the public's currency‑deposit ratio at 0.25. The monetary base is ₦500 million. The government announces a policy that will raise the required reserve ratio to 12 % while the currency‑deposit ratio stays unchanged. What is the percentage change in the money supply caused by this policy?

Answer Options

A. Increase of approximately 5.4 %
Correct Answer B. Decrease of approximately 5.4 %
C. Decrease of approximately 7.1 %
D. Decrease of approximately 3.2 %
Correct Answer
B
Correct Option:
Decrease of approximately 5.4 %

About This Question

This is Waec Model Questions Vol1 2021 Economics Question 18. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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