Gce Model Questions Vol1 2020 Economics Question 46
Practice objective / multiple choice question 46 from the 2020 Gce Model Questions Vol1 Economics examination.
The economy has an initial monetary base of \(200\) bn. The central bank reduces the required reserve ratio from \(5\%\) to \(4\%\) and at the same time purchases government securities worth \(20\) bn, adding this amount to the monetary base. Assuming banks lend out all excess reserves, calculate the change in the total money supply (in \(bn\)).
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About This Question
This is Gce Model Questions Vol1 2020 Economics Question 46. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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