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

      What are the measures of checking deflation?

1. Increasing money supply

2. Promote credit creation by the banks.

3. Curtailment in taxes so as to increase the purchasing power of the people.

Choose the correct measure.

A) 1 only

B) 2 only

C) 3 only

D) 1, 2, 3

Correct Answer: D

Solution :

Measures of checking deflation are:

(i) Increasing money supply.

(ii) Promoting credit creation by the banks.

(iii) Curtailment in taxes so as to increase the purchasing power of the people.

(iv) Increasing the public expenditure and the employment opportunities in the economy.

(v) Increasing the money supply in circulation by repayment of old public debts.

(vi) Providing of economic subsidy by the 10.