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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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