Post Utme Uniport 2023 Economics Question 5

Practice objective / multiple choice question 5 from the 2023 Post Utme Uniport Economics examination.

Post Utme Uniport 2023 Economics Objective / Multiple Choice
Question 5 POST_UTME_UNIPORT • 2023 • ECONOMICS • objective

A central bank is considering a monetary policy to reduce inflation. The central bank has the following instrument: reserve requirement. U\sing the concept of monetary policy transmission, explain how the central bank's action will affect the economy.

Answer Options

Correct Answer A. The central bank's action will reduce the money supply, which will lead to a decrease in inflation.
B. The central bank's action will increase the money supply, which will lead to an increase in inflation.
C. The central bank's action will have no effect on the money supply or inflation.
D. The central bank's action will increase the interest rate, which will lead to a decrease in inflation.
Correct Answer
A
Correct Option:
The central bank's action will reduce the money supply, which will lead to a decrease in inflation.

About This Question

This is Post Utme Uniport 2023 Economics Question 5. It is one of the objective questions from the 2023 Post Utme Uniport Economics examination.

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