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JAMB Economics 2008 Question 29

Question 29

Money and Inflation

The high rate of inflation in Nigeria can be attributed to

  1. A.increasing cost of production
  2. B.the appreciation of the naira
  3. C.decreasing cost of production
  4. D.high capacity utilization
Show the answer and explanation

Answer: A (increasing cost of production)

Explanation

Rising costs of fuel, power, transport and imported inputs push producers to raise prices (cost-push inflation).