Which of the following is a measure to control inflation? MCQ with Answer and Explanation

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Which of the following is a measure to control inflation?

A. Increase in government expenditure

B. Reduction in taxes during high inflation

C. Increase in CRR and SLR

D. Reduction in bank rate

Answer: Option C

Solution (By JKSSB Mock Tests)

Raising CRR and SLR reduces the lending capacity of banks, thereby contracting money supply and helping to control inflation.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Precautionary Saving' arises because:

A. Saving is independent of uncertainty

B. Individuals save more when future income is uncertain

C. Only permanent income matters

D. Individuals save only for retirement

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Correct Answer: Option B

Explanation:
Precautionary saving is additional saving undertaken by risk-averse agents to buffer against future income or expenditure uncertainty.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on tobacco products is:

A. 0%

B. 28% plus cess

C. 18%

D. 12%

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Correct Answer: Option B

Explanation:
Tobacco products attract 28% GST plus additional cess.

This question belongs to: Economy GK Economy Set 1

Question #3

Moral suasion by the RBI refers to:

A. buying securities from banks

B. raising reserve requirements

C. persuasion and advice to banks to follow monetary policy objectives

D. legal penalties on banks

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Correct Answer: Option C

Explanation:
Moral suasion is a non-statutory instrument of persuasion by the RBI to influence bank behaviour.

This question belongs to: Economy GK Economy Set 1

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