Waec Model Questions Vol1 2022 Economics Question 5
Practice objective / multiple choice question 5 from the 2022 Waec Model Questions Vol1 Economics examination.
In an economy the public holds currency equal to 30 % of their total deposits (currency‑deposit ratio c = 0.30). Banks keep required reserves equal to 10 % of deposits (reserve‑deposit ratio r = 0.10) and hold excess reserves equal to 5 % of deposits (e = 0.05). If the central bank purchases securities worth ₦500 million, calculate the total increase in the money supply (M1) that results, using the appropriate money multiplier. Express your answer in billions of naira, rounded to two decimal places.
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About This Question
This is Waec Model Questions Vol1 2022 Economics Question 5. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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