JAMB Economics 2011 Objective — Question 23

Question 23 of 49 from the Joint Admissions and Matriculation Board (JAMB) Economics 2011 Objective paper, with the correct answer and a full explanation.

An increase in the circulation of money without a corresponding increase in output will lead to

A. A. stagflation
B. B. deflation
C. C. inflationCorrect
D. D. a rise in income levels

Explanation

When money supply (money in circulation) increases without a corresponding increase in output, inflation results.

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