Which of the following is likely to be inflationary
ECONOMICS
JAMB 2020
Which of the following is likely to be inflationary
- A. taxes increase
- B. increase in unemployment
- C. budget surplus
- D. wages increase
Correct Answer: D. wages increase
Explanation
Increment in wages and salaries will lead to inflation. This happens when business owners raise the minimum wage, leading to a corresponding rise in the prices of their goods or services, thereby causing inflation. Remember inflation happens when there is excess money in the economy, thereby causing a general rise in prices.
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