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JAMB Economics 2005 Question 48

Question 48

Money and Inflation

The factor responsible for the current inflationary pressures in Nigeria is the

  1. A.exchange rate depreciation
  2. B.increase in exports
  3. C.low per capita income
  4. D.budget surplus
Show the answer and explanation

Answer: A (exchange rate depreciation)

Explanation

When the naira loses value, imported goods and inputs cost more, pushing up prices.