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UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Money Supply and Indian Financial System

  • question_answer
          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

    Correct Answer: C

    Solution :

    When inflation becomes very high, the RBI decreases supply of money (to check inflation) by adopting light monetary policy.


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