Question

Which of the following measures can be take to control inflation?

• A. Reducing Fiscal Deficit
• B. Monetary Policy
• C. Supply managements through imports
• D. All of above

Answer 1

The correct option is D All of above

following measures can be take to control inflation:-

• Reducing Fiscal Deficit- The budget deals with how a Government raises its revenue and spends it. If the total revenue raised by the Government through taxation, fees, surpluses from public undertakings is less than the expenditure it incurs on buying goods and services to meet its requirements of defence, civil admin­istration and various welfare and developmental activities, there emerges a fiscal deficit in its budget.
• Monetary Policy- Monetary policy refers to the adoption of suitable policy regarding interest rate and the avail­ability of credit. Monetary policy is another important measure for reducing aggregate demand to control inflation.
• Supply managements through imports- To correct excess demand relative to aggregate supply, the latter can also be raised by importing goods in short supply. In India, to check the rise in prices of food-grains, edible oils, sugar etc., the Government has often taken steps to increase imports of goods in short supply to enlarge their available supplies.