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With reference to inflation in India, which of the following statements is correct

,

With reference to inflation in India, which of the following statements is correct?

(a)

Controlling the inflation in India is the responsibility of the Government of India only

(b)

The Reserve Bank of India has no role in controlling the inflation

(c)

Decreased money circulation helps in controlling the inflation

(d)

Increased money circulation helps in controlling the inflation

Answer:

(c)

Core Books/NCERT

Explanation

Decreased money circulation leads to lesser money in hands of people to spend. Hence, lower demand (given the same supply) leads to falling prices fall and reduced inflation.Tikdam: it’s joint responsibility as both fiscal and monetary policy affects inflation statement 3 and 4 are contradictory; one has to be true.