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WAEC Commerce 2014 Question 19

Question 19

Banking

The central bank sometimes calls for special deposits from the commercial banks in order to

  1. A.reduce bank lending.
  2. B.increase bank lending.
  3. C.withdraw defaced currencies.
  4. D.issue new notes and coins.
Show the answer and explanation

Answer: A (reduce bank lending.)

Explanation

Special deposits take cash from banks, so they can lend less.