Q.

Which of the following can be used for checking inflation temporarily?

A. Increase in wages
B. Decrease in money supply
C. Decrease in taxes
D. None of these
Answer» B. Decrease in money supply
Explanation: An open market operation (also known as OMO) is an activity by a central bank to buy or sell government bonds on the open market. India's Open Market Operation is much influenced by the fact that it is a developing country and that the capital flows are much different than those in the other developed countries. Economists claim that an increase in money supply alone constitutes inflation.
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