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JAMB Economics 2011 Question 2

Question 2

Money and Inflation

An effective way of controlling inflation in a mixed economy is to

  1. A.increase productivity
  2. B.reduce income tax
  3. C.ration available output
  4. D.increase imports.
Show the answer and explanation

Answer: A (increase productivity)

Explanation

Inflation means too much money chasing too few goods. Producing more goods raises supply and brings prices down.