Which of the following is an example of expansionary monetary policy by the Central Bank of Nigeria?
A. Lowering income taxes B. Increasing the discount rate C. Increasing the reserve ratio D. Buying Treasury securities from commercial banks
Correct Answer: D
Explanation
Expansionary monetary policy is used to increase the money supply in an economy. When the Central bank buys securities, it aims to expand the volume of money in circulation and where there is too much money in circulation, the CBN will sell securities.
