Post Utme Coal City University 2023 Economics Question 16

Practice objective / multiple choice question 16 from the 2023 Post Utme Coal City University Economics examination.

Post Utme Coal City University 2023 Economics Objective / Multiple Choice
Question 16 POST_UTME_COAL_CITY_UNIVERSITY • 2023 • ECONOMICS • objective

The Central Bank of Nigeria (CBN) uses the following monetary policy tools to control inflation: (a) Open Market Operations (OMO), (b) Reserve Requirement, (c) Moral Suasion, and (d) all of the above. Which of the following is NOT a correct statement about the effect of OMO on inflation?

Answer Options

A. OMO increases the money supply, which leads to higher inflation.
B. OMO reduces the money supply, which leads to lower inflation.
C. OMO has no effect on inflation.
Correct Answer D. OMO increases interest rates, which leads to lower inflation.
Correct Answer
D
Correct Option:
OMO increases interest rates, which leads to lower inflation.

About This Question

This is Post Utme Coal City University 2023 Economics Question 16. It is one of the objective questions from the 2023 Post Utme Coal City University Economics examination.

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