Neco 2023 Economics Question 19
Practice objective / multiple choice question 19 from the 2023 Neco Economics examination.
A commercial bank currently holds deposits of N200 million. The reserve requirement ratio is 10 %. The bank's required reserves are therefore N20 million and it holds excess reserves of N5 million. The central bank conducts an open‑market purchase of N30 million government securities, crediting the banking system's reserves. Assuming the bank lends out all excess reserves after the operation, calculate the maximum possible increase in the total money supply (in N million).
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About This Question
This is Neco 2023 Economics Question 19. It is one of the objective questions from the 2023 Neco Economics examination.
Difficulty level: Medium .
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