Which of the following is used by the Central Bank of Nig...
Which of the following is used by the Central Bank of Nigeria to control inflation?
Tariff on imports
Tax rate
Exchange rate
Discount rate
Correct answer is D
Discount rate is the minimum interest rate set by the central bank of a country. It is used in controlling inflation. We all know inflation is an economic situation where the value of money falls and causes a rise in the general price level. Inflation occurs when there is excess money in circulation. This means that, much money will be used to purchase few goods.
The central bank uses discount rates to control inflation by taking out the excess money in circulation. They do this by increasing interest rates to encourage people to save or invest and discourage borrowings. By saving and investment, the excess money in the economy is taken out. For instance, if interest rates are set at 20%, people would prefer to save or invest their monies so as to get a high return on investment rather than borrowing from the banks and pay high interest rates.
The rate of output per worker (or group of workers) per unit time is called ...
Which of the following statement are TRUE of agriculture in Nigeria? (i) it provides food for the...
The additional satisfaction derived from the consumption of one or more unit of a good is called ...
Increased output will cause farmer's revenue to decrease when market demand is ...
Small firms are important for the development of a country because ...
A declining population is one in which the population is ...
A demand which gives rise to the reverse of the law of demand is__________ ...
Data presented in table are usually arranged in ...
Foreign exchange control in Nigeria is administered by the ...