passwella.
Menu

UI Post-UTME Economics 2021 (Model questions) Question 25

Question 25

Money and Inflation

When money supply increases in the economy, value of money......... and price.........respectively.

  1. A.increases, increases
  2. B.decreases, increases
  3. C.both remain constant
  4. D.falls, falls
Show the answer and explanation

Answer: B (decreases, increases)

Explanation

More money in circulation raises prices, so each unit of money is worth less.