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JAMB Economics 2013 Question 29

Question 29

Money and Inflation

Which of the following is used by the Central Bank of Nigeria to control inflation?

  1. A.Tariffs on imports.
  2. B.Tax rate.
  3. C.Exchange rate.
  4. D.Discount rate.
Show the answer and explanation

Answer: D (Discount rate.)

Explanation

Raising the discount (bank) rate makes borrowing dearer and reduces money supply; tariffs and taxes are fiscal tools.