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Which one of the following is not a correct measure to control inflation in an economy?
- a)Consumers are appealed to cut back the consumption of items which show higher inflation.
- b)Government and Central Bank tightening the flow of money through policy measures.
- c)Proactive measures to decrease the supply of items showing inflation in an economy.
- d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.
Correct answer is option 'C'. Can you explain this answer?
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Which one of the following is not a correct measure to control inflat...
Option c is the correct answer.
- Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
- Statement a is correct: The consumers are appealed to cut back the consumption of the items which show higher inflation (called austerity). This can reduce the demand and thus lead to lowering of prices due to low reduced demand.
- Statement b is correct: Government may tighten flow of money in the system (known as monetary measure)—central bank making money costlier (by increasing repo rate, increasing CRR, etc. in case of India). This step also has its own limitations—it is not effective if the items showing inflation are essential ones (such as wheat, rice, onion, potato, etc. because consumers don’t borrow money from banks to buy them).
- Statement c is incorrect: Inflation can be controlled by increasing the supply (decreasing the supply will further fuel inflation due to shortage of the product and increasing the demand simultaneously) of the items showing inflation, the government may go in for upscaling the production or import of the items.
- Statement d is correct: The Cost side measure to control inflation includes cutting indirect taxes which can bring in comfort and in the long-run cutting cost of production (by scaling up technology).
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Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer?
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Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer?.
Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which one of the following is not a correct measure to control inflation in an economy?a)Consumers are appealed to cut back the consumption of items which show higher inflation.b)Government and Central Bank tightening the flow of money through policy measures.c)Proactive measures to decrease the supply of items showing inflation in an economy.d)Indirect taxes can be reduced with the focus on cutting cost of production by companies.Correct answer is option 'C'. Can you explain this answer?.
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