Waec Model Questions Vol1 2017 Economics Question 30
Practice objective / multiple choice question 30 from the 2017 Waec Model Questions Vol1 Economics examination.
The Central Bank of Nigeria sets the required reserve ratio at 10 %. Commercial banks hold excess reserves equal to 2 % of deposits, and the public keeps cash equal to 5 % of the total money supply. Using the formula M = (1 + c) / (r + e + c), where c is the cash‑to‑deposit ratio, r the required reserve ratio and e the excess‑reserve ratio, calculate the effective money multiplier (rounded to two decimal places).
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About This Question
This is Waec Model Questions Vol1 2017 Economics Question 30. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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