By buying treasury bills, the Central Bank of Nigeria intends to

a

increase money supply in the economy

b

reduce the cash reserve ratio for banks

c

reduce money supply in the economy

d

increase the capital base of commercial banks

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Explanation

Correct Option
c

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Discussions (8)

Coolnezir
4 years ago

The correct answer is suppose to be option (A)increase money supply in the economy

tairutoheeb
2 years ago

can i still trust this cbt app
cus the acorrect answer to that question is A i dont understand why u are gonna put c as the answer there
please correct it i know it must be a mistake

olohideba
2 years ago

Pls my school look into this when the government through the central bank buys treasury bills they tend to release money into the economy, this increasing the amount of money in circulation, forgive my English pls.

Iember_codes
3 years ago

The correct answer is A, when the central bank by treasury bills they pay for it with money, thereby increasing the money in supply. When they sell, they collect money for it and this reduces money in circulation

OLUMYSCHOOL
1 year ago

THE ANSWER THERE IS CORRECT BECAUSE WHEN GOVERNMENT TENDS TO REDUCE MONEY SUPPLY WITH THE NOTION OF CONTROLLING INFLATION THEY ADOPT MONETARY POLICIES SUCH AS OPEN MARKET OPERATION (OMO) TREASURY BILLS AND OTHER MONETARY INSTRUMENTS USED FOR CURBING INFLATION THE ESSENCE OF ALL THESE IS TO REDUCE THE LIQUIDITY LEVEL AND OR REDUCE THE MONEY SUPPLY. I HOPE THIS HAS CLARIFIED THE CONFUSION.

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