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To control inflation, the monetary authorities of a country can

Economics
JAMB 2020

To control inflation, the monetary authorities of a country can

  • A. reduce taxes
  • B. advise the government to increase its expenditure
  • C. engage in expansive monetary policies
  • D. engage in restrictive monetary policies
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Correct Answer: Option D
Explanation

Governments can use a contractionary monetary policy to fight inflation by reducing the money supply within an economy through reduced bond prices and increased interest rates. 

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