Post Utme Unilorin 2025 Economics Question 13

Practice objective / multiple choice question 13 from the 2025 Post Utme Unilorin Economics examination.

Post Utme Unilorin 2025 Economics Objective / Multiple Choice
Question 13 POST_UTME_UNILORIN • 2025 • ECONOMICS • objective

The government of a country is considering a policy to reduce inflation. One option is to increase the reserve requirement for commercial banks. U\sing the money market equilibrium model, explain how this policy affects the money supply and inflation.

Answer Options

A. The policy increases the money supply, which leads to higher inflation.
Correct Answer B. The policy decreases the money supply, which leads to lower inflation.
C. The policy has no effect on the money supply or inflation.
D. The policy increases the money supply, but also increases the interest rate, which reduces inflation.
Correct Answer
B
Correct Option:
The policy decreases the money supply, which leads to lower inflation.

About This Question

This is Post Utme Unilorin 2025 Economics Question 13. It is one of the objective questions from the 2025 Post Utme Unilorin Economics examination.

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