Question 821:

• JAMB 1986

Gresham's law in economics shows that

A. Bad money drives good money out of circulation
B. Good money drives bad money out of circulation
C. Gold must be available to maintain the value of paper money
D. The price level varies directly with the quality of money

Question 822:

• JAMB 1986

Given that the cash reserve ratio is 10 percent, what is the maximum amount of that the banking system can create from an initial cash deposit of N1,000.00?

A. N100.00
B. N1,000.00
C. N9,000.00
D. N10,000.00

Question 823:

• JAMB 1986

The most important economic characteristic differentiating commercial banks from other financial institutions is their?

A. Function as a safe and profitable store place for savings
B. Role in financing balance of payment deficits
C. Status as an intermediary between savers and borrowers
D. Ability to create and destory money

Question 824:

• JAMB 1986

Deflation is a persistent fall in the general price level and is usually caused by?

A. A reduction in total demand
B. An increase in government spending
C. An increase in the money supply
D. An increase in aggregate demand

Question 825:

• JAMB 1986

Which of the following causes of inflation is related to demand-pull inflation?

A. Low productivity on farms and in firms
B. Poor storage facilities
C. Poor distribution system
D. Increase in expenditure on construction