In order to control inflation, the government should
ECONOMICS
WAEC 2015
In order to control inflation, the government should
- A. reduce the cost of borrowing
- B. buy securities in the open market
- C. adopt restrictive monetary policy
- D. discourage savings
Correct Answer: C. adopt restrictive monetary policy
Explanation
One popular method of controlling inflation is through a contractionary monetary policy. The goal of a contractionary policy is to reduce the money supply within an economy by decreasing bond prices and increasing interest rates.
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