Government can curb inflation by_________
ECONOMICS
WAEC 2021
Government can curb inflation by_________
- A. encouraging banks to lend for any purpose.
- B. increasing her own expenditure.
- C. buying treasury bills in the open market.
- D. selling securities in the open market
Correct Answer: D. selling securities in the open market
Explanation
One of the ways through which inflation can be controlled is through open market operation. This involves the buying or selling of government securities. When there is excess money in circulation leading to inflation, the federal government, through the central bank, sells securities to the public to mop out the excess money in circulation. That is, the government invites the public to invest in its treasury bills, government bonds.
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