Inflation n the Nigeria economy may be fueled by increase in?
QuestionInflation n the Nigeria economy may be fueled by increase in?
The correct answer is C.
This Economics question is asking what can lead to inflation in the Nigerian economy. Inflation is a situation where the general price level of goods and services in an economy increases over time.
There are four options to choose from. Option A suggests that an increase in the dollar price of crude oil could lead to inflation. Option B suggests that the sale of company shares could lead to inflation. Option D suggests that the sale of government bonds could lead to inflation.
The correct answer is Option C - government expenditure. This means that when the government spends more money than it collects in revenue, it injects more money into the economy. As a result, there will be more money chasing the same amount of goods and services, causing an increase in prices. This is known as demand-pull inflation.
It is important to note that other factors can also cause inflation. For example, supply-side factors such as an increase in production costs or a decrease in the supply of goods and services can lead to an increase in prices.
In summary, an increase in government expenditure can lead to inflation in the Nigerian economy. It is important for the government to manage its spending to avoid excessive inflation.
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