Post Utme Ui 2025 Economics Question 18

Practice objective / multiple choice question 18 from the 2025 Post Utme Ui Economics examination.

Post Utme Ui 2025 Economics Objective / Multiple Choice

Question 18 POST_UTME_UI • 2025 • ECONOMICS • objective

The Central Bank of Nigeria has increased the reserve requirement for commercial banks from 10% to 15%. U\sing the concept of money supply, explain why this increase may lead to a decrease in the money supply.

Correct Answer A. The increase in reserve requirement will lead to a decrease in the money multiplier, resulting in a decrease in the money supply.

B. The increase in reserve requirement will lead to an increase in the money multiplier, resulting in an increase in the money supply.

C. The increase in reserve requirement will have no impact on the money supply.

D. The increase in reserve requirement will lead to a decrease in the velocity of money, resulting in a decrease in the money supply.

Correct Answer

Correct Option:

The increase in reserve requirement will lead to a decrease in the money multiplier, resulting in a decrease in the money supply.

This is Post Utme Ui 2025 Economics Question 18. It is one of the objective questions from the 2025 Post Utme Ui Economics examination.

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