Neco 2021 Economics Question 3
Practice objective / multiple choice question 3 from the 2021 Neco Economics examination.
In an economy the currency‑to‑deposit ratio is \(c = 0.25\) and the required reserve ratio is \(rr = 0.10\). The central bank purchases securities worth \(\text{\u20A6}500\) million, adding this amount to bank reserves. Assuming banks lend out all excess reserves, what is the eventual increase in the total money supply? Give your answer in billions of naira, rounded to two decimal places.
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About This Question
This is Neco 2021 Economics Question 3. It is one of the objective questions from the 2021 Neco Economics examination.
Difficulty level: Medium .
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