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JAMB Economics 1979 Question 8

Question 8

Financial Institutions

The Central Bank controls the activities of other banks by all but one of the following. Which one?

  1. A.The use of bank rate
  2. B.The purchase or sale of government bonds on the open market
  3. C.Special deposit
  4. D.The use of directives
  5. E.Taxation.
Show the answer and explanation

Answer: E (Taxation.)

Explanation

Bank rate, open market operations, special deposits and directives are monetary tools; taxation is a fiscal tool of government.