WAEC Economics 2021 Objective — Question 37
Question 37 of 50 from the West African Examinations Council (WAEC) Economics 2021 Objective paper, with the correct answer and a full explanation.
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37. An increase in cash ratio by the central bank will
- A. increase the supply of money.
- B. increase banks' lending.
- C. encourage borrowing.
- D. reduce the supply of money.Correct
Explanation
A higher required cash ratio means banks must hold more reserves and can lend less, reducing the overall money supply.
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