Theory question 110
Money and InflationSection B
What efforts has the government of Nigeria made to combat inflation?
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Model answer
Efforts:
1. Tight monetary policy: higher bank rate/MPR, open market sales, higher reserve and liquidity ratios, credit ceilings.
2. Fiscal measures: cutting government spending, raising taxes, reducing deficits.
3. Price control and anti-hoarding laws.
4. Wage control / incomes policy.
5. Increasing local production of food and goods (Operation Feed the Nation, Green Revolution, agricultural loans).
6. Liberal import of essential goods and reduction of duties.
7. Improving transport and distribution.
8. Encouraging savings.
Explanation
Group measures into monetary, fiscal and direct controls.