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JAMB Economics 1989 Question 29

Question 29

Money and Inflation

A major factor affecting the value of money is the

  1. A.price level
  2. B.banking habit
  3. C.transaction motive
  4. D.divisible nature of money.
Show the answer and explanation

Answer: A (price level)

Explanation

The value of money is what it can buy, so it falls when the general price level rises and rises when prices fall.