Post Utme Uniport 2019 Economics Question 15

Practice objective / multiple choice question 15 from the 2019 Post Utme Uniport Economics examination.

Post Utme Uniport 2019 Economics Objective / Multiple Choice
Question 15 POST_UTME_UNIPORT • 2019 • ECONOMICS • objective

A country has a budget deficit of ₦500 billion and a GDP of ₦10 trillion. What is the likely effect of the budget deficit on the country's inflation rate?

Answer Options

Correct Answer A. The inflation rate will increase due to the increase in money supply.
B. The inflation rate will decrease due to the decrease in money supply.
C. The inflation rate will remain unchanged as the increase in money supply is offset by the decrease in demand.
D. The inflation rate will increase due to the increase in government sp\ending.
Correct Answer
A
Correct Option:
The inflation rate will increase due to the increase in money supply.

About This Question

This is Post Utme Uniport 2019 Economics Question 15. It is one of the objective questions from the 2019 Post Utme Uniport Economics examination.

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