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JAMB Economics 1979 Question 48

Question 48

Money and Inflation

Inflation can be curbed by

  1. A.increasing aggregate demand
  2. B.paying higher wages
  3. C.increasing government expenditure
  4. D.reducing aggregate demand
  5. E.a deficit budget.
Show the answer and explanation

Answer: D (reducing aggregate demand)

Explanation

Inflation is often caused by too much spending, so reducing aggregate demand slows price rises; the other options add to demand.