Monetary Policy - Nigerian version

Which body in Nigeria regulates the monetary system?

• The Central Bank of Nigeria

• The Monetary Policy

• The Debt Mangement Office

• The Federal Government

Monetary Policy is the Central Bank's attempt to...

• control the amount of money in circulation

• control the Federal Government's debt

• control state governments' spending

• none of these answers are correct.

If the Central bank decides to go to the Open Market to sell securities, what is the implication?

• increases money supply
• decreases money supply

If the Central bank decides to go to the Open Market to buy securities, what is the implication?

• increases money supply
• decreases money supply

What action would the Central bank take to control inflation?

• Purchase new securities at the OMO window

• Reduce the required Cash reserve ratio

• Increase tax rates

• Increase the benchmark interest rate

The MPC through the CBN announces it will lower discount/interest rates to banks. What is their intention?

• Fear economy is falling into a recession

• Fear the economy is growing too rapidly

• Fear the inflation is out of control

• all of these

The CBN issues an order to raise the Cash reserve requirement for banks. What is the reason for this action?

• Fear economy is falling into a recession

• Fear the economy is growing too rapidly, leading to inflation

• Fear jobs are being lost at an unusually high pace

• all of these

Monetary policy aim to influence

• aggregate demand (AD)

• aggregate supply (AS)

Which of the following are the right approaches used by Central Bank to influence money supply?

• Required Reserved Ratio

• Interest Rate

• Open-Market Operations

• Taxation

If Central Bank raises the required Cash Reserve Ratio, it would

• limit money supply

• increase money supply

• money supply remain unchanged