Post Utme Pan Atlantic University 2018 Economics Question 1

Practice objective / multiple choice question 1 from the 2018 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2018 Economics Objective / Multiple Choice
Question 1 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2018 • ECONOMICS • objective

The Central Bank of Nigeria (CBN) uses monetary policy tools to control inflation. Which of the following is a correct description of the effect of an increase in the reserve requirement on commercial banks?

Answer Options

Correct Answer A. The increase in reserve requirement will lead to a decrease in the money supply.
B. The increase in reserve requirement will lead to an increase in the money supply.
C. The increase in reserve requirement will have no effect on the money supply.
D. The increase in reserve requirement will lead to a decrease in the interest rate.
Correct Answer
A
Correct Option:
The increase in reserve requirement will lead to a decrease in the money supply.

About This Question

This is Post Utme Pan Atlantic University 2018 Economics Question 1. It is one of the objective questions from the 2018 Post Utme Pan Atlantic University Economics examination.

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