Waec Model Questions Vol1 2022 Economics Question 41
Practice objective / multiple choice question 41 from the 2022 Waec Model Questions Vol1 Economics examination.
The Central Bank purchases government securities worth ₦500 million, crediting the reserve accounts of commercial banks. The required reserve ratio is 12%. The public holds currency equal to 25% of total deposits. In addition, banks decide to hold excess reserves equal to 3% of deposits. Assuming no other changes, what is the maximum increase in the money supply (M1) resulting from this operation? Express your answer in millions of naira.
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About This Question
This is Waec Model Questions Vol1 2022 Economics Question 41. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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