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JAMB Economics 2003 Question 26

Question 26

Financial Institutions

The monetary control instrument most effectively used by the Central Bank of Nigeria is the

  1. A.open market operations
  2. B.margin requirement
  3. C.reserve ratio
  4. D.discount rate
Show the answer and explanation

Answer: A (open market operations)

Explanation

The CBN mainly controls the money supply by buying and selling government securities: open market operations.