Deposit Money Banks And The Creation Of Money Jamb Economics Past Questions
Question 1
The term "Money at call and short notice" in a bank's assets represents the bank's loans to______
- A. industry and commerce
- B. overseas central banks
- C. the capital market
- D. the money markets
Question 2
The term M 3^3 comprises M 1^1 together with deposits on deposit account held by_______
- A. banks only
- B. discount houses only
- C. banks and discount houses
- D. banks, discount houses and stock, exchanges
Question 3
A commercial bank can create money by
- A. issuing currency
- B. increasing cash ratio
- C. issuing cheque
- D. lending to borrowers
Question 4
Commercial banks can create money in the following ways
- A. by issuing coins and paper money
- B. by borrowing money from Banks abroad
- C. by receriving deposits from individuals
- D. by printing money on the instructions of the Central Bank
- E. none of the above
Question 5
The ability of commercial banks to create money depends on the
- A. reserve ratio
- B. liquidity ratio
- C. interest rate
- D. capital base
