Consider the following statements 1 Formation of Price stabilization fund in the budget 2017 18 to c...........

Economic Affairs Inflation

Consider the following statements:

1.Formation of Price stabilization fund in the budget 2017-18 to check volatility of prices of essential commodities.

2.Imposition on stock limits in respect of pulses, onion, edible oils and edible oil seeds under the Essential Commodities Act.

3.Announced higher Minimum Support Prices so as to incentivize production and thereby enhance availability of food items which may help moderate prices.

4.Revision of the repo rate and reverse repo rate

Which of the above measures are taken by the government to control inflation?

3 only

1, 3 and 4 only

1, 2 and 3 only

1, 2, 3 and 4

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Explanation:

1, 2 and 3 only

Formation of Price Stabilization Fund: The formation of a Price Stabilization Fund in the budget 2017-18 is a measure aimed at checking the volatility of prices of essential commodities. This is a step taken to stabilize prices and control inflation.

Imposition on Stock Limits under the Essential Commodities Act: Imposing stock limits on essential commodities like pulses, onion, edible oils, and edible oil seeds under the Essential Commodities Act is another measure to control inflation. This helps prevent hoarding and speculative trading, which can contribute to price volatility.

Announcement of Higher Minimum Support Prices (MSP): The announcement of higher Minimum Support Prices is a measure to incentivize production and enhance the availability of food items. This is done to moderate prices and ensure farmers receive a fair price for their produce.

Revision of Repo Rate and Reverse Repo Rate: While the revision of the repo rate and reverse repo rate is a monetary policy tool used by the central bank (Reserve Bank of India) to control inflation, it is not directly implemented by the government. The repo rate influences the cost of borrowing, and changes in these rates can impact inflation indirectly.

Therefore, the correct answer is Option 3: 1, 2, and 3 only.