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JAMB Economics 1980 Question 35

Question 35

Money and Inflation

The value of money depends primarily on

  1. A.the gold backing of the currency
  2. B.the gold backing of both currency and deposits
  3. C.the general price level
  4. D.government decree that it is legal tender
  5. E.none of the above.
Show the answer and explanation

Answer: C (the general price level)

Explanation

Money is worth what it can buy, so its value depends on the general price level.