To control inflation, the monetary authorities of a country can
ECONOMICSJAMB 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
Correct Answer: D. engage in restrictive monetary policies
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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