ECONOMICS
INFLATION
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
A by encouraging the government to reduce its spending
|
|
B by putting downward pressure on the country’s exchange rate
|
|
C by putting pressure on the central bank to reduce interest rates
|
|
D by reducing workers’ expectations of future inflation
|
Detailed explanation-1: -Deregulation of energy, housing and other markets would reduce the regulatory burden on businesses, lowering the cost of domestic production and bringing down prices.
Detailed explanation-2: -The Reserve Bank Of India(RBI) is statutorily obligated to target 4% CPI inflation. Containing consumer price inflation to a level as prescribed by the Central Government, in consultation with it, is RBI’s statutory responsibility (Section 45ZA of RBI Act) since 2016.
Detailed explanation-3: -To keep inflation low and stable, the Government sets us an inflation target of 2%. This helps everyone plan for the future. If inflation is too high or it moves around a lot, it’s hard for businesses to set the right prices and for people to plan their spending.