Gce Model Questions Vol1 2020 Economics Question 24
Practice objective / multiple choice question 24 from the 2020 Gce Model Questions Vol1 Economics examination.
In an economy the public holds currency equal to 30 % of bank deposits (currency‑deposit ratio \(c = 0.3\)) and banks keep reserves equal to 10 % of deposits (reserve‑deposit ratio \(r = 0.1\)). The central bank purchases government securities worth £50 bn, paying by increasing bank reserves. Assuming the ratios \(c\) and \(r\) remain unchanged, calculate the resulting change in the money supply.
Answer Options
About This Question
This is Gce Model Questions Vol1 2020 Economics Question 24. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
Master the Exam!
You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.