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Which measure can the Central Bank use to control inflation through monetary policy?
  • a)
    Reducing taxes
  • b)
    Raising the bank rate
  • c)
    Increasing the cash reserve ratio
  • d)
    Increasing government spending
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Which measure can the Central Bank use to control inflation through mo...
Raising the bank rate increases the cost of borrowing for commercial banks, which can help to reduce the overall money supply in the economy. This is a key monetary policy tool for combating inflation.
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