Neco Model Questions Vol1 2020 Economics Question 49
Practice objective / multiple choice question 49 from the 2020 Neco Model Questions Vol1 Economics examination.
Suppose the required reserve ratio is 10 % and the public holds currency equal to 30 % of bank deposits (currency‑deposit ratio \( c = 0.3 \)). The banking system initially has excess reserves of ₦5 million. The central bank buys government securities worth ₦20 million, crediting the reserves of commercial banks. What is the total increase in the money supply resulting from this open‑market operation?
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About This Question
This is Neco Model Questions Vol1 2020 Economics Question 49. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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