Question on: JAMB Economics - 2020
To control inflation, the monetary authorities of a country can
A
reduce taxes
B
advise the government to increase its expenditure
C
engage in expansive monetary policies
D
engage in restrictive monetary policies
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Correct Option: D
Restrictive monetary policy is also known as contractionary monetary policy.
A contractionary monetary policy is a type of monetary policy that is intended to reduce the rate of monetary expansion to fight inflation.
The policy reduces the money supply in the economy to prevent excessive speculation and unsustainable capital investment.
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