Question : The supply-side measure to control inflation is:
Option 1: reducing public expenditure
Option 2: price control through the public distribution system
Option 3: higher taxation to mop up liquidity
Option 4: credit control
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Correct Answer: price control through the public distribution system
Solution : The correct option is reducing public expenditure .
Reducing public expenditure involves the government cutting back on its spending, which can help to reduce overall demand in the economy and, in turn, mitigate inflationary pressures.
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