McqMate
| Q. |
The supply-side measure to control inflation is - |
| A. | Reducing public expenditure |
| B. | Price control through Public Distribution System |
| C. | Higher taxation to mop up liquidity |
| D. | Credit control |
| Answer» B. Price control through Public Distribution System | |
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Explanation: The issue of inflation is addressed from both demand and supply sides. demand management is achieved by measures such as postponing public expenditure, mopping up excess liquidity either through taxes or savings schemes, etc. On the supply side, the mechanism of Public Distribution System (PDS) ensures availability of essential commodities for the vulnerable sections of society, This helps to maintain price levels. Coupled with this is the open market sale of rice and wheat resorted to by FCI from its buffer stock in times of price rise. |
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