EconomicsFinancial institutionsJAMB
A commercial bank receives a deposit of ₦10,000 and the cash reserve ratio is 10%. The maximum total deposits that can be created in the banking system is
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Answer: D. ₦100,000
The money multiplier is 1/0.1 = 10, so total deposits can reach 10 × ₦10,000.
An AdmitMe practice question, written for the JAMB syllabus. Not an official past question.