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JAMB Economics 1995 Question 38

Question 38

Money and Inflation

The sharp increases in the prices of most goods and services during the last quarter of 1994 in Nigeria were mainly due to

  1. A.ban on importation of foreign goods
  2. B.population upsurge
  3. C.the introduction of value-added tax
  4. D.increase in transport costs.
Show the answer and explanation

Answer: C (the introduction of value-added tax)

Explanation

Value-added tax was introduced in Nigeria in 1994; as a tax on goods and services it pushed up their prices.