Neco Model Questions Vol1 2024 Economics Question 14
Practice objective / multiple choice question 14 from the 2024 Neco Model Questions Vol1 Economics examination.
In a country the required reserve ratio is 10 % and the public holds currency equal to 25 % of bank deposits (currency‑deposit ratio \(c = 0.25\)). The central bank purchases government securities worth ₦500 million, paying by increasing bank reserves. Using the money multiplier formula \(m = \frac{1+c}{r+c}\), where \(r\) is the required reserve ratio, calculate the resulting increase in the money supply. Express your answer in millions of Naira, rounded to the nearest million.
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About This Question
This is Neco Model Questions Vol1 2024 Economics Question 14. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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