Question on: JAMB Economics - 2020
One of the techniques of monetary control used by the central bank of Nigeria is
A
selective credit control
B
budget deficit
C
foreign exchange control
D
monitoring the general price level
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Correct Option: C
The Central Bank of Nigeria (CBN) employs various monetary policy tools to control the money supply and influence economic activity. Selective credit control is one such technique.
- Selective credit control involves the CBN directing credit towards or away from specific sectors of the economy. This can be achieved by setting credit ceilings, varying interest rates, or imposing stricter loan requirements for certain industries.
The other options are not direct monetary control techniques:
- Budget deficit is a fiscal policy tool, related to government spending and revenue.
- Foreign exchange control is a tool to manage the country's currency exchange rates.
- Monitoring the general price level is an objective of monetary policy, not a technique used to achieve it.
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