Neco 2025 Economics Question 48
Practice objective / multiple choice question 48 from the 2025 Neco Economics examination.
The central bank imposes a required reserve ratio of 10 %. A commercial bank holds ₦200 million in deposits, of which ₦20 million are required reserves. The remaining reserves are excess reserves. The bank decides to lend out 75 % of its excess reserves. Assuming the money multiplier remains equal to the reciprocal of the required reserve ratio, calculate the total increase in the money supply resulting from this lending.
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About This Question
This is Neco 2025 Economics Question 48. It is one of the objective questions from the 2025 Neco Economics examination.
Difficulty level: Medium .
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