Question on: JAMB Economics - 1995
The best method to curb inflation in Nigeria is to
A
reduce importation of commodities
B
increase the general level of production
C
reduce the volume ofmoney supply
D
set up price control boards
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Correct Option: B
Here's why the answer is C:
- Inflation and Money Supply: Inflation is often caused by too much money chasing too few goods and services. Reducing the money supply decreases the amount of money available in the economy, which can help to cool down demand-pull inflation.
- Why other options are less effective:
- A: Reducing imports might help a little, but it doesn't directly address the root cause of inflation.
- B: Increasing production is a good long-term strategy but takes time and may not immediately curb inflation.
- D: Price control boards can distort the market and are often ineffective in controlling inflation in the long run.
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