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WAEC Economics 1997 Question 10

Question 10

Money and Inflation

The value of money is affected by the

  1. A.speculative motive
  2. B.price level
  3. C.transactionary motive
  4. D.precautionary motive
  5. E.employment level
Show the answer and explanation

Answer: B (price level)

Explanation

The value of money is its purchasing power, which falls when the general price level rises.