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WAEC Economics 2015 Question 24

Question 24

Money and Inflation

Inflation may occur if there is

  1. A.excess supply over demand
  2. B.increase in productivity.
  3. C.excessive demand with limited supply
  4. D.increased government spending in a depressed economy.
Show the answer and explanation

Answer: C (excessive demand with limited supply)

Explanation

Too much demand chasing too few goods pushes prices up.