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WAEC Economics 2015 Question 42

Question 42

Money and Inflation

In order to control inflation, the government should

  1. A.reduce the cost of borrowing.
  2. B.buy securities in the open market
  3. C.adopt restrictive monetary policy.
  4. D.discourage savings.
Show the answer and explanation

Answer: C (adopt restrictive monetary policy.)

Explanation

A restrictive (tight) monetary policy reduces money supply and spending.