Money, Banking and Financial Institutions

A commercial bank receives an initial cash deposit of ₦50,000. If the central bank specifies a cash reserve ratio of 20%, what is the total amount of deposits created in the banking system?

A commercial banking system generates a total deposit expansion of $₦600,000$ from an initial cash injection of $₦150,000$. If the central bank subsequently raises the cash reserve ratio by $5\%$, what is the new total deposit expansion that the banking system can generate from the same initial cash injection?

Match each Nigerian specialized development financial institution listed on the left with its primary operational mandate and economic objective on the right.

Match each type of money on the left with its corresponding economic definition or characteristic on the right.

Merchant banks in Nigeria operate primarily as wholesale financial institutions providing medium- to long-term corporate credit and investment banking services, but unlike commercial banks, they are legally restricted from accepting retail demand deposits or participating directly in the retail clearing house system.

An industrial firm in Nigeria requires underwriting services for a new issue of corporate debentures and equipment leasing for factory expansion, while a regional farming association requires long-tenor, concessionary credit tailored to agricultural storage infrastructure. Which pair of financial institutions is structured to directly fulfill the respective financing requirements of the firm and the association?

In an economy operating under Fisher's Quantity Theory of Money ($MV = PT$), the initial stock of money ($M$) is ₦500 million, the velocity of money circulation ($V$) is 4, and the total volume of transactions ($T$) is 100 million units. If the money supply increases by $25\%$, the velocity of circulation decreases by $10\%$, and the volume of transactions increases by $25\%$, what is the new price level ($P$)?

Match each function or characteristic of money listed on the left with its correct economic description on the right.

Suppose an economy is experiencing severe demand-pull inflation caused by excessive liquidity and rapid credit expansion across commercial banks. Which combination of monetary policy actions should the Central Bank implement to effectively contract the money supply and restore macroeconomic stability?

The central bank of an economy compiles the following financial data (in billions of Naira):

- Currency in circulation outside vault cash: $\text{N}450\text{ billion}$
- Demand deposits at commercial banks: $\text{N}750\text{ billion}$
- Savings deposits at commercial banks: $\text{N}500\text{ billion}$
- Time deposits at commercial banks: $\text{N}300\text{ billion}$
- Treasury bills held by the non-bank public: $\text{N}200\text{ billion}$

Based on the data provided, what are the exact values of the narrow money supply ($M_1$) and the broad money supply ($M_2$), respectively?

The central monetary authority of an economy published the following financial statistics (in billions of Naira):

- Currency notes and coins held by the non-bank public: $380$
- Vault cash inside commercial bank tills: $70$
- Demand deposits of the non-bank public at commercial banks: $620$
- Savings and fixed time deposits at commercial banks: $950$
- Government deposits held at the central bank: $150$

Calculate the total value of narrow money supply ($M_1$) in billions of Naira.

A manufacturing firm seeking to raise long-term debt capital to expand its production plant would issue which of the following financial instruments on the capital market?

In an economic statistics report of a country, the total currency in circulation outside commercial banks is $\text{N}300\text{ billion}$ and demand deposits held in commercial banks total $\text{N}500\text{ billion}$. In addition, savings deposits stand at $\text{N}250\text{ billion}$. What is the value of the narrow money supply ($M_1$) in billions of Naira?

In a national economy, the initial money supply ($M$) is $\text{N}800$ billion and the velocity of circulation ($V$) is $5$. The total volume of physical transactions ($T$) is $200$ million units. If the monetary authority increases the money supply by $25\%$ while the velocity of circulation declines by $10\%$, assuming the general price level ($P$) remains constant, what is the new total volume of transactions ($T$) in millions of units?

To bridge a temporary 90-day shortfall in working capital, a reputable private corporation issues an unsecured promissory note directly to institutional investors. Which financial instrument is being utilized, and which market segment does it belong to?

Match each financial institution category or specialized bank in Nigeria on the left with its corresponding primary operational function and financing mechanism on the right.

In a barter economy, the difficulty of making deferred payments arises primarily because goods used in exchange fluctuate in value and are prone to perishability over time.

During periods of rapid inflation, individuals tend to spend money immediately rather than holding onto cash savings because purchasing power declines over time. Which function of money is directly impaired in this situation while its role in facilitating daily trade continues?

Treasury Certificates in the money market are short-term debt instruments issued by commercial banks to provide long-term capital financing for private corporate enterprises.

Match each function of money listed on the left with its primary economic role or application on the right.