Question

The best way to tackle inflation is _________.

• A. increase production and productivity
• B. ban export of goods
• C. encourages import
• D. rationing of essential goods

Answer 1

Answer: (A)

increase production and productivity

Inflation is an economic situation where the general price level in the economy for all the relevant goods has a constant appreciable rise over a considerable period of time which is a result of either an increase in the supply of money that increases purchasing power in the economy or some decrease in production of real output in the economy that leads to excess demand in the economy.
The best way to tackle inflation is to increase the production of commodities in the economy. So when the productivity is increased in the economy,
it will automatically increase the supply which will balance the excess demand in the economy and inflation will be corrected.