Gce Model Questions Vol1 2024 Economics Question 32
Practice objective / multiple choice question 32 from the 2024 Gce Model Questions Vol1 Economics examination.
A country's monetary base is £200 billion. The currency‑to‑deposit ratio is \(c = 0.25\) and the required reserve ratio is initially \(r = 10\%\). The central bank raises the required reserve ratio to \(12\%\) while the currency‑to‑deposit ratio remains unchanged. Using the money‑multiplier formula \(m = \dfrac{1+c}{r+c}\), calculate the decrease in the total money supply (in £ billions) caused by this policy change.
Answer Options
About This Question
This is Gce Model Questions Vol1 2024 Economics Question 32. It is one of the objective questions from the 2024 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.