ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A by encouraging the government to reduce its spending
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B by putting downward pressure on the country’s exchange rate
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C by putting pressure on the central bank to reduce interest rates
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D by reducing workers’ expectations of future inflation
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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.