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UI Post-UTME Economics 2021 (Model questions) Question 12

Question 12

Money and Inflation

One of the following has been identified as a solution to inflation in an economy.

  1. A.Reduction in production
  2. B.Minimum wage legislation
  3. C.Increased money supply
  4. D.Maximum wage legislation
Show the answer and explanation

Answer: D (Maximum wage legislation)

Explanation

Fixing a ceiling on wages keeps production costs and spending down, which helps check inflation. Cutting output or raising money supply would make inflation worse.