Neco Model Questions Vol1 2025 Economics Question 6
Practice objective / multiple choice question 6 from the 2025 Neco Model Questions Vol1 Economics examination.
The money multiplier is given by \(m = \frac{1 + c}{c + r}\), where \(c\) is the currency‑deposit ratio and \(r\) is the required reserve ratio. The Central Bank wishes to raise the money supply from ₦500 billion to ₦600 billion. The current currency‑deposit ratio is 0.25 and the required reserve ratio is 0.15, and these ratios will remain unchanged. How much new reserves must the Central Bank inject (in billions of naira) to achieve the target?
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About This Question
This is Neco Model Questions Vol1 2025 Economics Question 6. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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