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JAMB Economics 1979 Question 30

Question 30

Money and Inflation

The proportion of currency in the money supply

  1. A.is higher in developing countries than advanced countries
  2. B.is lower in developing countries than advanced countries
  3. C.is the same in both developing and advanced countries
  4. D.grows as the economy develops
  5. E.none of the above.
Show the answer and explanation

Answer: A (is higher in developing countries than advanced countries)

Explanation

Banking habits are weaker in developing countries, so cash makes up a bigger share of money supply there.