passwella.
Menu

WAEC Economics 2021 Question 37

Question 37

Financial Institutions

An increase in cash ratio by the central bank will

  1. A.increase the supply of money.
  2. B.increase banks' lending.
  3. C.encourage borrowing.
  4. D.reduce the supply of money.
Show the answer and explanation

Answer: D (reduce the supply of money.)

Explanation

Banks must keep more cash, so they lend less and money supply falls.