Which of the following is an example of expansionary monetary policy by the Central Bank of Nigeria?
Answer Details
An example of expansionary monetary policy by the Central Bank of Nigeria is "buying Treasury securities from commercial banks."
Expansionary monetary policy is a type of policy implemented by the central bank to stimulate economic growth and increase the supply of money in the economy. This policy is typically used during times of economic downturn or recession to encourage spending and investment.
When the Central Bank of Nigeria buys Treasury securities from commercial banks, it injects money into the economy. This increases the amount of money available in the banking system, making it easier for banks to lend to businesses and individuals. By increasing the money supply, the central bank aims to lower interest rates, which in turn encourages borrowing and spending.
Lower interest rates mean that businesses and individuals can access credit more easily, leading to increased investment, consumer spending, and economic growth. This expansionary policy can help support economic activity, boost employment, and stimulate overall economic recovery.