Post Utme Lasu 2021 Economics Question 21

Practice objective / multiple choice question 21 from the 2021 Post Utme Lasu Economics examination.

Post Utme Lasu 2021 Economics Objective / Multiple Choice
Question 21 POST_UTME_LASU • 2021 • ECONOMICS • objective

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the use of fertilizers. However, some critics argue that the policy will lead to an increase in inflation. Which of the following is a possible reason for this increase in inflation?

Answer Options

A. The increased demand for fertilizers will lead to a shortage of fertilizers, cau\sing prices to rise.
Correct Answer B. The subsidies provided to farmers will lead to an increase in the money supply, cau\sing inflation.
C. The improved irrigation systems will lead to an increase in crop yields, cau\sing prices to fall.
D. The increased use of fertilizers will lead to an increase in the \cost of production, cau\sing prices to rise.
Correct Answer
B
Correct Option:
The subsidies provided to farmers will lead to an increase in the money supply, cau\sing inflation.

About This Question

This is Post Utme Lasu 2021 Economics Question 21. It is one of the objective questions from the 2021 Post Utme Lasu Economics examination.

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