Post Utme Nile University 2024 Economics Question 38

Practice objective / multiple choice question 38 from the 2024 Post Utme Nile University Economics examination.

Post Utme Nile University 2024 Economics Objective / Multiple Choice

Question 38 POST_UTME_NILE_UNIVERSITY • 2024 • ECONOMICS • objective

A central bank uses monetary policy to control inflation. Explain how an increase in the money supply affects the price level.

Answer Options

A. An increase in the money supply leads to a decrease in the price level.

Correct Answer B. An increase in the money supply leads to an increase in the price level.

C. An increase in the money supply has no effect on the price level.

D. An increase in the money supply leads to a decrease in the price level in the short run, but an increase in the price level in the long run.

Correct Answer

Correct Option:

An increase in the money supply leads to an increase in the price level.

About This Question

This is Post Utme Nile University 2024 Economics Question 38. It is one of the objective questions from the 2024 Post Utme Nile University Economics examination.

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