ASSIGNMENT ON BFN 122/BAM 124/GNS 125- PRINCIPLES OF ECONOMICS 2

Given that the cash reserve of the commercial banks is 10%, if Mr. Owonikoko Jamiu deposit N250,000 with G.T. Bank and GT Bank gave Mr. Alashela Kojumote a loan of  N225, 000 which he later deposited in his Zenith Bank.The zenith Bank gave Mrs.

Banuso Ojutonsoro a loan of N202,500 which she deposited into her First Bank  and First Bank later gave a bank draft of N182,250 as a loan to Mr. Aiyegbajeje Emiloju which he deposited into EcoBank.

The process continue, as a student of Management and Business Studies complete the table below, show workings and determine: The amount of money which commercial banks have created in form of:

i.                    Deposit

ii.                  Liquidity Ratio

iii.                Loan

b. What are the limitations on commercial Banks’s power in creating credits or

money?             

                                                                BEST OF LUCK!

                               Patriot Odunaro B.J (08038454008)
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