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JAMB Economics 1997 Question 33

Question 33

Money and Inflation

Which of the following is inflationary?

  1. A.An increase in taxation
  2. B.An increase in savings
  3. C.A decrease in money supply
  4. D.An increase in government expenditure.
Show the answer and explanation

Answer: D (An increase in government expenditure.)

Explanation

Higher government spending puts more money in people's hands and raises total demand, pushing prices up. The other options reduce spending.