Financial Institutions - Jamb Economics Past Questions and Answers

Question 61:

• JAMB 1993

The sum of N80,000 is deposited in a bank and the cash ratio of the banking system is 10%. calculate the sum of money the bank can create from the deposit?

A. N 100 000
B. N 800 000
C. N 1000 000
D. N 8000 000

Question 62:

• JAMB 1994

Monetary policy aimed at reducing demand-pull inflation in the country maybe carried out through?

A. Increase in taxation of private companies, public corporations and private individuals
B. Increase in cash reserve ratio of commercial banks and the sale of government securities
C. Decrease in goverment expenditure on education
D. Direct price control in the market place

Question 63:

• JAMB 1995

the Central Bank's expansionary monetary policy is justified at a period?

A. When the inflation rate is high and the economic is experiencing a boom
B. Of economic depression accompanied by low capacity utilization
C. When trade unions are clamouring for higher wages
D. When price of crude petroleum is rising

Question 64:

• JAMB 1995

A bank is said to be distressed when it?

A. Is unable to deal with the Central Bank
B. Has a low level of capital base
C. Has low level of deposits
D. Experiences serious liquidity crisis

Question 65:

• JAMB 1995

One method through which the Central Bank can restrict the commercial banks' power of credit expansion is to?

A. Demand for increased special deposit
B. Decrease the cash ratio
C. Buy securities in the open market
D. Reduce the rate of interests at which banks borrow from it