JAMB Commerce 2008 Objective — Question 16

Question 16 of 50 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2008 Objective paper, with the correct answer and a full explanation.

16. In order to prevent liquidity problems in commercial banks, the central bank uses

A. moral suasion
B. fiscal policy
C. reserve ratioCorrect
D. taxation policy

Explanation

Reserve ratio specifies the amount of deposit a commercial bank must keep in its vault; raising it prevents liquidity problems.

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