Inflation

Indian Economy

Title

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Indian Economy - Understanding the basics of Indian economic system

Which of the following can be regarded as measures taken by government to reduce inflation in an economy?

1. Increase in repo rate

2. Establishing stock holding limits on essential commodities

3. Printing more currency notes

Select the correct answer using codes given below

1 and 3 only

1 and 2 only

All are correct

2 and 3 only

Printing more currency (also known as deficit financing) leads to increase in inflation by infusing more liquidity in economy