Waec Model Questions Vol1 2023 Economics Question 2
Practice objective / multiple choice question 2 from the 2023 Waec Model Questions Vol1 Economics examination.
The Central Bank purchases government securities worth ₦200 million, injecting this amount into the banking system. The public holds currency equal to 30% of their deposits (currency‑deposit ratio c = 0.30). Required reserve ratio is 10% (r = 0.10) and banks keep excess reserves equal to 5% of deposits (e = 0.05). Assuming the monetary base rises by the full purchase amount, what is the eventual increase in the total money supply after the process stabilises?
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About This Question
This is Waec Model Questions Vol1 2023 Economics Question 2. It is one of the objective questions from the 2023 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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