Post Utme Bells University 2023 Economics Question 1

Practice objective / multiple choice question 1 from the 2023 Post Utme Bells University Economics examination.

Post Utme Bells University 2023 Economics Objective / Multiple Choice
Question 1 POST_UTME_BELLS_UNIVERSITY • 2023 • ECONOMICS • objective

Consider a country with a fixed exchange rate of ₦5 per US dollar. If the country's central bank sells $100 million to the foreign exchange market, what is the expected impact on the domestic money supply?

Answer Options

A. The money supply will increase by ₦500 million.
Correct Answer B. The money supply will decrease by ₦500 million.
C. The money supply will remain unchanged.
D. The money supply will increase by ₦1 billion.
Correct Answer
B
Correct Option:
The money supply will decrease by ₦500 million.

About This Question

This is Post Utme Bells University 2023 Economics Question 1. It is one of the objective questions from the 2023 Post Utme Bells University Economics examination.

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