Neco 2019 Economics Question 34

Practice objective / multiple choice question 34 from the 2019 Neco Economics examination.

Neco 2019 Economics Objective / Multiple Choice Medium Difficulty
Question 34 NECO • 2019 • ECONOMICS • objective

The central bank sets the reserve‑requirement ratio at 10 %. It intends to increase the money supply by ₦200 million. To do this it purchases government securities worth ₦30 million from the public. Assuming banks hold no excess reserves, calculate the total increase in the money supply resulting from this operation and state whether the target increase is achieved.

Answer Options

A. Total increase = ₦270 million; target achieved (no)
Correct Answer B. Total increase = ₦300 million; target achieved (yes)
C. Total increase = ₦200 million; target achieved (yes)
D. Total increase = ₦240 million; target achieved (no)
Correct Answer
B
Correct Option:
Total increase = ₦300 million; target achieved (yes)

About This Question

This is Neco 2019 Economics Question 34. It is one of the objective questions from the 2019 Neco Economics examination.

Difficulty level: Medium .

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