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      Question

      Which of the following methods is used to control

      inflation in India?
      A Welfare Schemes by Government of India only Correct Answer Incorrect Answer
      B National Banks increase interest rates Correct Answer Incorrect Answer
      C Decreased money circulation Correct Answer Incorrect Answer
      D Increased money circulation Correct Answer Incorrect Answer

      Solution

      Inflation is closely related to interest rates, which can influence exchange rates. When inflation is high, RBI will increaseinterestrates inordertobringinflationbackintoanacceptablerange. As a result money circulation is reduced in the economy.

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