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WAEC Economics 2000 Question 38

Question 38

Money and Inflation

Inflation can best be checked by

  1. A.allowing supply to remain constant
  2. B.decreasing supply and increasing wages
  3. C.increasing supply and holding wages constant
  4. D.decreasing supply and wages.
Show the answer and explanation

Answer: C (increasing supply and holding wages constant)

Explanation

More goods reduce excess demand, and holding wages stops costs and spending from pushing prices up further.