JAMB Economics 2008 Objective — Question 30
Question 30 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2008 Objective paper, with the correct answer and a full explanation.
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If the required reserves of a bank is 20% and N10000 is paid into its demand deposit account, what is the excess reserves?
- A. #2000
- B. #8000Correct
- C. #12000
- D. #18000
Explanation
The deposit is N10000 and the reserve ratio is 20% i.e. 20% of N10,000 = N2000. Deduct that from the deposit = N10,000 - N2,000 = N8,000 (excess reserve).
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