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WAEC Commerce 1992 Question 63

Question 63

Banking

Commercial bank deposits with the Central Bank help to

  1. A.increase loan prospects
  2. B.control the supply of money and credits
  3. C.check bank frauds
  4. D.increase bank customers
  5. E.encourage rural banking services
Show the answer and explanation

Answer: B (control the supply of money and credits)

Explanation

By changing the reserves commercial banks must keep with it, the Central Bank controls how much they can lend.